Researching Accounting Standards
To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. In this chapter, we discussed the acquisition of an entire business and the accounting ramifications of such transactions. For this case, we will use Statement of FinancialAccounting Standards No.141“Business Combinations.” Open FASB Statement No. 141.
1. Read paragraph 43. The FASB defines goodwill in this paragraph. What is that definition?
2. Read paragraph 45. In the case of negative goodwill, what is to be done with the remaining excess after all designated assets are reduced to zero?
3. Read paragraph 47. What standard outlines the accounting for goodwill and other intangible assets?