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For all asset acquisitions under Australian AASB accounting standards, acquired goodwill is recognized when the cost...

For all asset acquisitions under Australian AASB accounting standards, acquired goodwill is recognized when the cost of acquisition is: Select one: less than the fair value of the net assets acquired. less than the fair value of the net assets acquired and the acquisition is of a business. greater than the fair value of the net assets acquired. greater than the fair value of the net assets acquired and the acquisition is of a business.

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Answer #1

When a business is acquired, cost of acquisition needs to be paid.

For this process, the fair value of the net assets should be arrived. If the fair value of net assets is less than the cost of acquisition, then the difference should be recorded as Goodwill. The difference is treated as Goodwill of the business acquired.

Putting the above together, we can say that Goodwill should be recognised when Business is acquired and the fair value of net assets is less than the cost of acquisition. This implies, Goodwill should be recognised when cost of acquisition is greater than the fair value of net assets and the acquisition is of a business.

Correct Option is fourth one. Greater than the fair value of net assets acquired and the acquisition is of a business.

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