medium · Financial Accounting accounting-cycle-financial-statements
Acquirer Co. pays $400 million for Target Co. The fair value of Target's identifiable net assets is $450 million. After a thorough reassessment of all fair values, the $50 million difference remains.
How is this recorded?
- As a $50 million bargain purchase gain in Net Income.
- As $50 million of negative goodwill in the Equity section.
- As a $50 million reduction in the carrying value of long-lived assets.
- As a deferred credit that is amortized over 15 years.
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