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:

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