If the Total Acquisition Value of an Acquired Not-For-Profit Entity

question 41

Multiple Choice

If the total acquisition value of an acquired not-for-profit entity is greater than the fair value of all identifiable net assets of the entity, and that entity's revenues are not generated by rendering goods or services or from membership dues, then the excess of acquisition value over identifiable net assets is immediately reported:

• A) As goodwill on the consolidated Statement of Position.
• B) As a pro-rata increase to the identifiable assets and liabilities acquired.
• C) As a direct reduction in unrestricted net assets on the Statement of Financial Position.
• D) As a reduction in unrestricted net assets on the Statement of Activities.
• E) As an increase in other assets on the Statement of Financial Position.

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Definitions:

Self-Actualization

The realization or fulfillment of one's talents and potentialities, often considered to be a driving motivation in humans.

Ivan Pavlov

was a Russian physiologist best known for his work in classical conditioning, particularly his experiments with dogs, demonstrating the learning process that came to be known as Pavlovian conditioning.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior.

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit a similar response.