When the implied value exceeds the aggregate fair values of identifiable net assets, the residual difference is accounted for as goodwill.
Long-term debt and other obligations of an acquired company should be valued for consolidation purposes at their fair value.
On January 1, 2010, Lester Company purchased 70% of Stork Corporation's $5 par common stock for $600,000. The book value of Stork net assets was $640,000 at that time. The fair value of Stork's identifiable net assets were the same as their book value except for equipment that was $40,000 in excess of the book value. In the January 1, 2010, consolidated balance sheet, goodwill would be reported at $177,143.
When the value implied by the purchase price of a subsidiary is in excess of the fair value of identifiable net assets, the workpaper entry to allocate the difference between implied and book value includes a 1. debit to Difference Between Implied and Book Value. 2. credit to Excess of Implied over Fair Value. 3. credit to Difference Between Implied and Book Value. c. 3
If the fair value of the subsidiary's identifiable net assets exceeds both the book value and the value implied by the purchase price, the workpaper entry to eliminate the investment account debits Difference Between Implied and Book Value.
The entry to amortize the amount of difference between implied and book value allocated to an unspecified intangible is recorded 1. on the subsidiary's books. 2. on the parent's books. 3. on the consolidated statements workpaper. c. 3

The excess of fair value over implied value must be allocated to reduce proportionally the fair values initially assigned to none of the above.
The SEC requires the use of push down accounting when the ownership change is greater than 95%
Under push down accounting, the workpaper