CPA Financial Accounting and Reporting (FAR) - Goodwill

1

Diego Company buys all outstanding assets and liabilities of Francisco Company on January 1, Year 3, by giving up consideration of $3.5 million. On that date, Francisco's net assets have a book value of $3 million and a fair value of $3.7 million. Which of the following statements is true?

2

Under IFRS regulations, goodwill should be tested for impairment at ________.

3

Lion Company pays $10 million for all outstanding shares of Tiger Company. On the date of the purchase, Tiger company has net identifiable assets with a book value of $8 million and a fair value of $8.5 million. Which of the following statements is true?

4

ABC Inc owns 55% of the voting stock of DEF Inc. ABC would not produce consolidated financial statements if:

5

Herring Company buys 100% of the outstanding shares of Catfish Company during Year 1. On a consolidated balance sheet produced immediately after the sale, goodwill of $250,000 is reported. How was this goodwill determined?

6

Of the following factors, which would not be an indicator of an investor's ability to exercise significant influence over the operating and financial policies of an investee?

Goodwill

Practice Questions