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InterviewSolution
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What Is Good Will ? |
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Answer» Goodwill in FINANCIAL statements arises when a company is purchased for more than the fair value of the identifi able NET ASSETS of the company. The difference between the purchase price and the sum of the fair value of the net assets is by definition the value of the "goodwill" of the purchased company. The ACQUIRING company must recognize goodwill as an asset in its financial statements and present it as a separate line item on the BALANCE sheet. Goodwill in financial statements arises when a company is purchased for more than the fair value of the identifi able net assets of the company. The difference between the purchase price and the sum of the fair value of the net assets is by definition the value of the "goodwill" of the purchased company. The acquiring company must recognize goodwill as an asset in its financial statements and present it as a separate line item on the balance sheet. |
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