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

question 9

Multiple Choice

If the total acquisition value of an acquired not-for-profit organization is greater than the fair value of all identifiable net assets of the organization, and that organization's revenues are not earned by dues or other types of earned revenues, then the excess of acquisition value over identifiable net assets is immediately reported:

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

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Definitions:

Progression

refers to the process of developing, advancing, or moving forward, whether in terms of career, skills, or achievements.

Withdrawal

A psychological or physical retreat from a situation, relationship, or obligation.

Progression

Refers to the act of moving forward or advancing towards a more developed state or stage.

Stimulating Performance

The process of encouraging or motivating employees to improve their work output or to perform at a higher standard.