Podcast
Questions and Answers
How is goodwill calculated in a business acquisition?
How is goodwill calculated in a business acquisition?
- 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.
How are impairments of asset investments accounted for?
How are impairments of asset investments accounted for?
- 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.
What are upstream and downstream sales?
What are upstream and downstream sales?
- 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.