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1. We have dealt with primarily two consolidation methods acquisition and purchase method. In both cases upon acquisition, goodwill may be created. What does goodwill

1. We have dealt with primarily two consolidation methods acquisition and purchase method. In both cases upon acquisition, goodwill may be created. What does goodwill represent? Under SFAS 142 we are required to test goodwill for impairment at least annually. How is this done? Have companies actually written down goodwill? 2.Currently FASB rules establish that companies should have consolidated financial statements when a company is more than 50% owned by another company. However, Federal tax regulations state that a parent subsidiary relationship exists when one company is 80% owned by another company. This is a 30% difference. Which do you think is more realistic and which offers the prospective investor the more accurate information

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