Asked by Nicol Quezada on Jun 24, 2024
Verified
How should goodwill acquired in a business combination be allocated?
A) Proportionately to assets
B) Proportionately to fair-value increments
C) To cash-generating units
D) It is not allocated.
Cash-Generating Units
The smallest identifiable group of assets that generates cash inflows independently of other assets or groups of assets.
Business Combination
A transaction or event in which a buyer obtains control of one or more businesses.
Goodwill
An intangible asset reflecting the premium paid over the fair market value of assets during an acquisition, attributed to the company's brand, customer relations, and reputation.
- Understand how Goodwill should be allocated following a business combination.
Verified Answer
Learning Objectives
- Understand how Goodwill should be allocated following a business combination.
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