The projected acquisition cost is expected to exceed substantially the current fair value of the identifiable net assets to be acquired, which the competitor has agreed to sell because of its substantial net losses of recent years. The board of directors of Software asks if the excess acquisition cost may appropriately be recognized as goodwill.
InstructionsPrepare a memorandum to the board of directors an answer to the question, after consulting the guidelines issued by either FASB or IASB