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Question
Which of the following is not true about purchase accounting?
a. For financial reporting purposes, all M&As must be recorded using the purchase method of accounting.
b. Under the purchase method of accounting, the excess of the purchase price over the targets net asset value is treated as goodwill on the combined firms balance sheet.
c. Goodwill may be amortized up to 40 years.
d. If the fair value of the targets net assets later falls below its carrying value, the acquirer must record a loss equal to the difference.
e. None of the above
Answer
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