B) Business combinations when the purchase price exceeds the fair value of identifiable net assets. Goodwill = Purchase Price − Fair Value of identifiable net assets. Tested for impairment, not amortized (IFRS/GAAP).

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Goodwill arises in:

A All transactions

B Business combinations when the purchase price exceeds the fair value of identifiable net assets

C Internal development

D Inventory purchases

✓ Correct Answer: Option B

Goodwill = Purchase Price − Fair Value of identifiable net assets. Tested for impairment, not amortized (IFRS/GAAP).

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Goodwill arises in:

✓ Correct Answer: Option B

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