Purchased Goodwill Is Recognised as the Amount Of

question 41

Multiple Choice

Purchased goodwill is recognised as the amount of:

• A) The excess of the cost of acquisition incurred by an acquirer over the fair value of the identifiable net assets acquired.
• B) The difference between the cost of acquisition of a subsidiary and the realisable value of net assets of the subsidiary.
• C) The lower of the sum of related expenditures on advertising and promotion undertaken in the last 2 years by the subsidiary being purchased and the independent valuation of the market value of that subsidiary's goodwill.
• D) The excess of the cost of acquisition of another entity by an acquiring entity over the recoverable value of the identifiable net assets acquired.
• E) The excess of the cost of acquisition incurred by an acquirer over the fair value of the identifiable net assets and contingent liabilities acquired.

---

Definitions:

GDP Deflator

An indicator that measures the pricing of all new, domestically made, final goods and services in an economy.

Real GDP

The measure of a country's economic output adjusted for price changes, providing a more accurate view of an economy's size and growth.

Real GDP

A measure of a country's economic output adjusted for inflation, giving a more accurate view of an economy's size and how it's growing over time.

Nominal GDP

The gross domestic product measured at current market prices, without adjusting for inflation, reflecting the current value of goods and services produced.