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Financial Accounting

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When Can Goodwill Be Recorded As Asset?

FINACT-J@GLHY

Goodwill can be recorded as asset when

A

there is a binding contract to buy a business at more than the sum of the fair value of the net assets.

B

a business has above normal profitability due to favorable conditions that are not prior transactions.

C

a business can establish that it has goodwill among customers and a track record of loyalty.

D

a firm pays more than the fair value of the net assets for a business.