Which statement is not correct?

Multiple Choice

• Purchased goodwill equals the purchase price of the firm acquired less the current fair value of net assets (assets less liabilities) acquired.

• Goodwill is only recorded when purchased

• Goodwill cannot be the result of the purchasers paying too high a price for the company.

• When the fair market value of the net assets acquired is greater than the purchase price, the purchaser has received a bargain and the result is called negative goodwill.