How Is Negative Goodwill Treated Under the Acquisition Method

question 61

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 and allocated to the fair value of the identifiable net assets of the acquired company.

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Definitions:

P-value

In statistical hypothesis testing, it represents the probability of observing a test statistic as extreme as, or more extreme than, the value observed under the assumption that the null hypothesis is true.

Sample Data

Sample data refers to a subset of a population selected for measurement, observation, or questioning, to provide statistical analysis.

Matched Pairs

A study design where each subject is paired with a similar subject, or the same subject is tested under different conditions, to reduce variability in the data.

Sample Values

Specific measurements or observations collected from a portion of a larger group or population for analysis.