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 ____________________.

Identify the role of opportunity cost in economic decisions.

Understand how market failure can affect economic efficiency.

Appreciate the impact of incentives on individual and collective decision-making.

Realize the importance of trade and specialization in improving economic outcomes.

---

Definitions:

Innate Propensities

Natural tendencies or inclinations that individuals are born with.

Social Development

The process by which individuals acquire the values, behaviors, and social skills necessary for functioning effectively in society.

Personality Formation

The process through which children develop their own unique patterns of feeling, thinking, and behaving in a wide variety of circumstances.

Leader

An individual who guides or directs a group towards achieving specific goals or objectives.