C. Compare fair value of reporting unit with amounts assigned to identifiable net assets plus goodwill. An excess of the fair value of the reporting unit over the value of the net assets indicated...

C. Compare fair value of reporting unit with amounts assigned to identifiable net assets plus goodwill.

An excess of the fair value of the reporting unit over the value of the net assets indicated that the price paid was reasonable and below a theoretical maximum purchase price. It requires no adjustment of assigned values. If, however, the fair value of the net assets, including goodwill, exceeds the fair value of the reporting unit, the model used to determine the fair value of the reporting unit should be reassessed. If the re-estimation of the values assigned to the net assets, including goodwill, and the reporting unit still indicates an excess of the value of the net assets, including goodwill, over the value of the reporting unit, goodwill is to be tested for impairment. This would likely result in an impairment loss being recorded on the goodwill at the time of the acquisition.