Goodwill

Goodwill

		Business combinations (*1)
Method		Acquisition
Identifiable assets Identifiable liabilities		Fair value (*2)
Goodwill (*3)		IFRS Full goodwill or Partial goodwill U.S. GAAP Full goodwill

(*1) e.g., merger, purchase, or consolidation
(*2) at the time of the acquisition
(*3) Full goodwill > Partial goodwill

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(Question)
If an acquirer decides to purchase only 80% of a target company, under IFRS they will have the option to:

A. report the acquisition as either a business combination or as acquisition.
B. value the identifiable assets and liabilities of the target at their current book values or at fair market value.
C. report more or less goodwill depending on the accounting method they choose.


Answer: C