FASB ASC 805, Business Combinations, provides principles for allocating the fair value of an acquired business. When

Question:

FASB ASC 805, “Business Combinations,” provides principles for allocating the fair value of an acquired business. When the collective fair values of the separately identified assets acquired and liabilities assumed exceed the fair value of the consideration transferred, the difference should be:

  a. Recognized as an ordinary gain from a bargain purchase.
  b. Treated as negative goodwill to be amortized over the period benefited, not to exceed 40 years.
  c. Treated as goodwill and tested for impairment on an annual basis.
  d. Applied pro rata to reduce, but not below zero, the amounts initially assigned to specific noncurrent assets of the acquired firm.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Advanced Accounting

ISBN: 978-1259444951

13th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni

Question Posted: