The excess of the purchase price paid for a company over the fair market value of identifiable intangible and tangible assets acquired is goodwill.

Question

Quizplus · Accepted Answer

This statement is true. Goodwill is the amount paid by a company over the fair market value of the identifiable assets it acquires during a business acquisition. It represents the value of the intangible assets of the acquired company, such as reputation, brand name, customer loyalty, and intellectual property. Goodwill is considered an intangible asset on the acquiring company's balance sheet and is subject to annual impairment tests.

The Excess of the Purchase Price Paid for a Company