To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at http://www.fasb.org. Click on “Pronouncements & EITF Abstracts.”

In this chapter, we discussed the acquisition of an entire business and the accounting ramifications of such transactions. For this case, we will use Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations.” Open FASB Statement No. 141R.

1. Read paragraph 3. The FASB defines goodwill in this paragraph. What is that definition?
2. Read paragraph 36. In the case of bargain purchase, what is to be done with the excess of the fair value of the net assets over the amount paid for the acquisition?
3. Read paragraph B160. What two criteria are used to determine whether an intangible asset should be recognized separately from goodwill?