Schweser claims that if the purchase price is less than the fair market value of the subsidiary then the negative goodwill recorded should be adjusted against non current assets. This doesn’t make much sense to me as what I would assume by looking at it is, it seems like you are making some profit by getting subsidiary at a cheaper price, why would this be a loss and should be recorded against non current assets?
This was previously the way a bargain acquisition was recorded - the difference was offset against noncurrent assets. Post December 2008, IFRS and US GAAP methodologies converged. They both treat a bargain acquisition as a gain in income st. Not sure why Schweser would test that, i would have thought it would be based on the new methodology