Choose the correct. An acquired firm’s financial records sometimes show goodwill from previous business combinations. How does a parent company account for the preexisting goodwill of its newly acquired subsidiary?a. The parent tests the preexisting goodwill for impairment before recording the goodwill as part of the acquisition.b. The parent includes the preexisting goodwill as an identified intangible asset acquired.c. The parent ignores preexisting subsidiary goodwill and allocates the subsidiary’s fair value among the separately identifiable assets acquired and liabilities assumed.d. Preexisting goodwill is excluded from the identifiable assets acquired unless the subsidiary can demonstrate its continuing value.
Choose the correct. An acquired firm’s financial records sometimes show
a. The parent tests the preexisting goodwill for impairment before recording the goodwill as part
of the acquisition.
b. The parent includes the preexisting goodwill as an identified intangible asset acquired.
c. The parent ignores preexisting subsidiary goodwill and allocates the subsidiary’s fair value
among the separately identifiable assets acquired and liabilities assumed.
d. Preexisting goodwill is excluded from the identifiable assets acquired unless the subsidiary can
demonstrate its continuing value.
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