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Sagot :
Option b) Goodwill is the right response. A purchase consideration is the amount paid to the target company when a firm buys another company as part of a business agreement.
This purchase consideration is typically decided upon at the time of the acquisition by the acquirer and the target company. When the purchase price paid exceeds the target business's fair market value, the excess is seen as having been paid for the target company's goodwill, which is subsequently recorded as part of the acquisition of another firm. And if the purchase consideration is less than the target company's market value, or if the purchase consideration exceeds the target company's fair market value, the difference is recorded as a capital reserve.
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