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A company acquires 100% of a target company for a purchase price of 4.5million.Thenetidentifiableassetsofthetargetcompanyhaveafairvalueof4.5 million. The net identifiable assets of the target company have a fair value of 4.5million.Thenetidentifiableassetsofthetargetcompanyhaveafairvalueof5 million. In the period the acquisition occurs, the acquiring company most likely reports:
A
goodwill of $0.5 million.
B
a pretax gain of $0.5 million in profit and loss.
C
a pretax gain of $0.5 million in other comprehensive income.
