When the Purchase Price of Another Entity Exceeds the Book

question 87

Short Answer

When the purchase price of another entity exceeds the book value of the entity's net assets the purchaser allocates the excess to identifiable assets and liabilities in order to revalue them to market value and any additional excess is allocated to ____________________.

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Definitions:

Sensitive

Having the capacity to perceive and respond to changes or stimuli; can also refer to an individual's susceptibility to emotional influences.

Motivated

Having a strong willingness or drive to accomplish something or pursue a particular task.

Growth Mindset

The belief that one's talents and abilities can be developed through perseverance, effort, and the process of learning.

Fixed Mindset

The belief that one's abilities, intelligence, and talents are fixed traits that cannot be significantly developed.