In the Event of a Negative Acquisition Differential, Under What

question 30

Multiple Choice

In the event of a negative acquisition differential, under what circumstances is it still possible to have positive goodwill?

• A) It is not possible; once there is a negative acquisition differential, the result is negative goodwill.
• B) If the fair values of the subsidiary's net assets are less than their carrying amounts and if the total consideration is greater than the fair value of the subsidiary's identifiable nets assets, there will be positive goodwill.
• C) If the total consideration exceeds the carrying value of the subsidiary's identifiable nets assets, there will be positive goodwill.
• D) If the carrying values of the subsidiary's net assets are less than their fair values and if the total consideration is greater than the carrying amount of the subsidiary's identifiable nets assets, there will be positive goodwill.

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Definitions:

Nicotine

A stimulant and addictive substance found in tobacco, affecting the nervous system.

Withdrawal Symptoms

Physical or psychological symptoms that follow the abrupt discontinuation of a drug or substance to which one is addicted.

Addiction

A compulsive, chronic, physiological or psychological need for a habit-forming substance, behavior, or activity having harmful physical, psychological, or social effects.

Type I Alcoholism

A pattern of alcohol dependence that typically emerges after the age of 25 and is less strongly associated with genetic factors.