The acquiring company records goodwill equal to the purchase price less the book value of the net assets acquired.The acquiring company records goodwill equal to the purchase price less the fair value of the net assets acquired.

Question

Quizplus · Accepted Answer

Goodwill is recorded as the excess of the purchase price over the fair value of the net assets acquired, not the book value.

The Acquiring Company Records Goodwill Equal to the Purchase Price