Which of the following best describes the calculation of goodwill in the context of a business acquisition?

The excess of the purchase price over the fair market value of the target's net identifiable assets.

The purchase price minus the fair market value of the target's tangible assets.

The tangible assets a company possesses, such as property, plant, and equipment, that can be sold or utilized in operations.

The difference between the purchase price and the historical cost of the target's net assets.