term used in a business combination. Negative goodwill is accounted for under the PURCHASE (ACCOUNTING)METHOD when the fair market value of the net assets of the acquired company exceeds the purchase price paid.The credit difference reduces the noncurrent assets acquired (except for long-term investments) on a proportionate basis. If any remaining credit exists, it is accounted for as a deferred credit and amortized over the period benefitted, not exceeding 40 years.