How Is Negative Goodwill Treated Under the Acquisition Method

question 31

Multiple Choice

How is negative goodwill treated under the acquisition method?

• A) The acquiring company will report a gain on acquisition.
• B) The acquiring company will report a loss on acquisition.
• C) The negative goodwill will be included in other comprehensive income, as it is essentially an unrealized gain.
• D)The negative goodwill is prorated using the fair values of the acquired company's net assets.

---

Definitions:

Self-Disclosure

The act of revealing personal, private, or sensitive information about oneself to others.

Nonverbal Cues

Forms of communication without words, such as gestures, facial expressions, and body language, that convey messages or emotions.

E-Body Language

This term refers to non-verbal cues and signals people use when communicating electronically, such as through email or social media, including the use of emojis, punctuation, and capitalization to convey mood or emphasis.

Correspondence

The act of communicating by writing or email, typically involving an exchange of letters or messages.