How Is Negative Goodwill Treated in Accounting for a Joint

question 36

Multiple Choice

How is negative goodwill treated in accounting for a joint venture in the year of acquisition?

• A)Included in the investor's equity in the earnings of the investee
• B)Included in the carrying value of the investment
• C)Allocated among the assets and liabilities
• D)Shown as a line item on the SFP

---

Definitions:

Retina

A layer at the back of the eyeball containing cells that are sensitive to light and that trigger nerve impulses that pass via the optic nerve to the brain, resulting in visual perception.

Fovea

A small depression in the retina of the eye where visual acuity is highest due to the concentration of cones.

Common Cause

A factor that simultaneously affects multiple variables, leading to an association between them.

Blindness

The condition of lacking visual perception due to physiological or neurological factors.