Can you please help me confirm if my understanding is correct for this scenario?
Company A acquires 100% of shares company B for 100k. Net assets value of company B is negative 300k.
Individual accounts company A:
Debit: Assets- Inv. In subsidiaries:100k
Credit: Cash/banks
At consolidated accounts of the group it is booked a goodwill of 400k.
Comments?
Thanks
Acquire 100% of company
Re: Acquire 100% of company
generally your understanding is correct
you may want to double check whether there are any assets to be recognised that Entity B did not recognise,
or maybe the fair value of assets recognised at B is higher than their book value
how would you answer this question: what makes up this goodwill? why are you paying more than the value of net assets?
you may want to double check whether there are any assets to be recognised that Entity B did not recognise,
or maybe the fair value of assets recognised at B is higher than their book value
how would you answer this question: what makes up this goodwill? why are you paying more than the value of net assets?
Re: Acquire 100% of company
If nothing else identified, is goodwill impaired anyway?
Re: Acquire 100% of company
Whoa why?