Goodwill is measured as the difference between the:
A) cost of the assets given up, and the cost of the net assets acquired
B) cost of the net assets acquired, and the net present value of the consideration given up
C) present value of the consideration transferred, and the present value of the net assets acquired
D) consideration transferred, and the fair value of the assets and liabilities acquired

Question

Quizplus · Accepted Answer

Goodwill is the excess of consideration transferred over the fair value of the assets and liabilities acquired. This is because the fair value of the assets and liabilities acquired represents their actual value, while the consideration transferred represents the amount paid in excess of this value to acquire the assets and/or business. Therefore, option D is the best choice.

Goodwill Is Measured as the Difference Between The