Asked by Kristine Mae Almodiel on Jun 18, 2024
Verified
Goodwill is reported on a consolidated balance sheet only if it was acquired in a merger or acquisition.
Goodwill
An accounting value assigned to the reputation, customer loyalty, or other factors enabling a business to earn higher profits than expected from its assets alone.
Consolidated Balance Sheet
A financial statement showing the aggregated financial position of a parent company and its subsidiaries.
- Grasp the accounting implications of mergers and acquisitions including the treatment of goodwill.
Verified Answer
KA
Keyla AdeetaJun 23, 2024
Final Answer :
True
Explanation :
Goodwill is only reported on a consolidated balance sheet if it was acquired in a merger or acquisition as it is an intangible asset that represents the premium paid over the fair value of the acquired company's net assets. If there was no acquisition, there would be no goodwill to report.
Learning Objectives
- Grasp the accounting implications of mergers and acquisitions including the treatment of goodwill.