alleryStart learning →Goodwill arising on amalgamation represents a payment made in anticipation of what?
AFuture income
BAsset revaluation
CPast losses
DTax refunds
Answer & Solution
Correct answer: A. Future income
The transferee pays above net assets expecting extra earnings, which is why goodwill is treated as an asset.
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Related questions
In a merger, the Profit and Loss balance can alternatively go to which reserve?Consideration for amalgamation is the aggregate of securities issued and what else?AS 14 defines fair value as the amount for an asset exchange between whom?Statutory reserves keep their identity only when the transferee complies with what?When can amalgamation goodwill be amortised beyond five years?In the pooling method, conflicting accounting policies are handled how?In merger accounting, resultant assets, liabilities, capital and reserves roughly equal whIf a scheme departs from AS 14 on reserves, what must be disclosed?