In a Business Combination Accounted for as an Acquisition, How

question 32

Multiple Choice

In a business combination accounted for as an acquisition, how should the excess of fair value of net assets acquired over the consideration paid be treated?

• A) Amortized as a credit to income over a period not to exceed forty years.
• B) Amortized as a charge to expense over a period not to exceed forty years.
• C) Amortized directly to retained earnings over a period not to exceed forty years.
• D) Recorded as an ordinary gain.

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Definitions:

Aggregate Demand

The total amount of goods and services demanded in an economy at a given overall price level and in a given time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time, indicating the cost of living or inflation rate.

Dividend Yield

An economic indicator demonstrating the ratio of a company's annual dividends to its stock price.

Constant Rate

A fixed rate that does not change over the specified period of time.