If one company buys another for less than the net book value of its assets,this is regarded as "negative goodwill" and does not require that the assets and liabilites be revalued at "fair value"

Question

Quizplus · Accepted Answer

Negative goodwill occurs when the purchase price is less than the fair value of the net assets acquired, but it still requires that the assets and liabilities of the acquired company be revalued at fair value according to accounting standards. Negative goodwill is recognized as a gain in the income statement.

If One Company Buys Another for Less Than the Net