A subsidiary was acquired for cash in a business combination on January 1, 2006. The purchase price exceeded the fair value of identifiable net assets. The acquired company owned equipment with a market value in excess of the carrying amount as of the date of combination. A consolidated balance sheet prepared on December 31, 2006, would
- Report the unamortized portion of the excess of the market value over the carrying amount of the equipment as part of goodwill.
- Report the unamortized portion of the excess of the market value over the carrying amount of the equipment as part of plant and equipment.
- Report the excess of the market value over the carrying amount of the equipment as part of plant and equipment.
- Not report the excess of the market value over the carrying amount of the equipment because it would be expensed as incurred.