Acquire 100% of company

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cbarbosa
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Joined: 16 Nov 2020, 17:56

Acquire 100% of company

Post by cbarbosa »

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
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Marek Muc
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Re: Acquire 100% of company

Post by Marek Muc »

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?
JRSB
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Re: Acquire 100% of company

Post by JRSB »

If nothing else identified, is goodwill impaired anyway?
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Marek Muc
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Re: Acquire 100% of company

Post by Marek Muc »

Whoa why?
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