A firm is purchased for more than the fair market value of its assets. The excess is:
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A. B. C. D.C
Goodwill is defined as the price paid in excess of the fair market value of the assets of the target firm. Under US GAAP, only Goodwill generated during acquisitions is capitalized; it does not allow capitalization of internally generated Goodwill. The capitalized Goodwill is amortized over a period which can range from a few years to as long as 40 years.