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.

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Definitions:

Directive Leadership Style

A leadership approach characterized by providing clear instructions, setting performance standards, and closely supervising tasks.

Telling Style

A communication approach characterized by directly informing or instructing others without seeking their input.

Telling

A leadership behavior characterized by giving clear instructions and guidance to followers, informing them exactly how and when to complete the task.

Directive Approach

A leadership style in which decisions and policies are made by the leader and directly communicated to subordinates, with little input from them.