{"id":44321,"date":"2024-04-15T21:42:05","date_gmt":"2024-04-15T21:42:05","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=44321"},"modified":"2024-04-15T21:42:05","modified_gmt":"2024-04-15T21:42:05","slug":"excess-of-cost-of-investment-over-paid-up-value-of-the-shares-is-considered-as","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/excess-of-cost-of-investment-over-paid-up-value-of-the-shares-is-considered-as\/","title":{"rendered":"Excess of cost of investment over paid-up value of the shares is considered as"},"content":{"rendered":"

[amp_mcq option1=”goodwill” option2=”capital reserve” option3=”minority interest” option4=”none of the above” correct=”option1″]<\/p>\n

The correct answer is: A. goodwill<\/strong><\/p>\n

Goodwill is an intangible asset that arises when a company acquires another company for more than the fair value of its net assets. It is often referred to as the “premium” that the acquiring company pays for the target company’s brand, customer base, or other intangible assets.<\/p>\n

Goodwill is recorded on the acquiring company’s balance sheet as an intangible asset. It is amortized over a period of 10 years, or less if the company can demonstrate that it will have a shorter useful life.<\/p>\n

Goodwill is a significant asset for many companies. In 2018, the total goodwill on the balance sheets of U.S. companies was over $2 trillion.<\/p>\n

Here are brief explanations of each option:<\/p>\n