Accounting Investment Methods

Goodwill is calculated as the average of the purchase consideration and net assets acquired.

Goodwill is calculated as the fair value of net assets acquired.

Goodwill is calculated as the excess of the purchase consideration over the fair value of net assets acquired. (correct)

Goodwill is calculated as the total purchase consideration.

Impairments, which represent a permanent decline in fair value, are recognized as a write-down. (correct)

Impairments are recognized as an increase in fair value.

Impairments are recognized as temporary declines.

Impairments are not recognized as a decline in fair value.

Upstream sales are from parent to subsidiary, while downstream sales are from subsidiary to parent.

Upstream sales are from subsidiary to parent, while downstream sales are from parent to subsidiary. (correct)

Upstream and downstream sales refer to sales within the same company.

Upstream and downstream sales refer to sales between unrelated companies.