Question

Goodwill is generally defined as:Cost of the investment less the subsidiary's book value at the beginning of the year.Cost of the investment less the subsidiary's book value at the acquisition date.Cost of the investment less the fair value of the subsidiary's net assets and previously unrecorded intangible assets at the beginning of the year.Cost of the investment less the fair value of the subsidiary's net assets and previously unrecorded intangible assets at acquisition date.Is no longer allowed under Federal Law.

Answer 1

Cost of the investment less the subsidiary's book value at the acquisition date

Step-by-step explanation:

The goodwill will be recognize at acquisition when the purchase value of a subsidiary, which is the fair value, is different than his book value.

It will be checked for impairment or subject to amortization if needed to.

It is the difference between market value and book value of a business when it is being purchased.