Problem $2-5($Static$)($LO $2-4)$

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

Multiple Choice

Treated as goodwill and tested for impairment on an annual basis.

Aecognized as an ordinary gain from a bargain purchase.

Treated as regative goodwill to be amortired ever the period benefited, not so exceed abyear.

Applied pro rata to reduce, but not below zero, the amounts initially assigned to seecific noncomert ausets of the acoured tim.