Why Do Goodwill & Other Intangibles Get Created In An Acquisition?

1.	Why Do Goodwill & Other Intangibles Get Created In An Acquisition?
Answer» These represent the value over the “fair MARKET value” of the seller that the BUYER has paid. You calculate the number by subtracting the book value of a company from its equity PURCHASE price. More SPECIFICALLY, Goodwill and Other Intangibles represent things like the value of customer relationships, brand names and intellectual property – VALUABLE, but not true financial Assets that show up on the Balance Sheet. These represent the value over the “fair market value” of the seller that the buyer has paid. You calculate the number by subtracting the book value of a company from its equity purchase price. More specifically, Goodwill and Other Intangibles represent things like the value of customer relationships, brand names and intellectual property – valuable, but not true financial Assets that show up on the Balance Sheet.

Answer»

These represent the value over the “fair MARKET value” of the seller that the BUYER has paid. You calculate the number by subtracting the book value of a company from its equity PURCHASE price. More SPECIFICALLY, Goodwill and Other Intangibles represent things like the value of customer relationships, brand names and intellectual property – VALUABLE, but not true financial Assets that show up on the Balance Sheet.

These represent the value over the “fair market value” of the seller that the buyer has paid. You calculate the number by subtracting the book value of a company from its equity purchase price. More specifically, Goodwill and Other Intangibles represent things like the value of customer relationships, brand names and intellectual property – valuable, but not true financial Assets that show up on the Balance Sheet.

Discussion

No Comment Found

Related InterviewSolutions

Explain Why We Would Write Down The Seller’s Existing Deferred Tax Asset In An M&a Deal?
How Do You Account For Dtls In Forward Projections In A Merger Model?
Could You Get Dtls And Dtas In An Asset Purchase?
Why Do Deferred Tax Liabilities (dtls) And Deferred Tax Assets (dtas) Get Created In M&a Deals?
Walk Me Through The Most Important Terms Of A Purchase Agreement In An M&a Deal?
What’s An Earn Out And Why Would A Buyer Offer It To A Seller In An M&a Deal?
How Would An Accretion / Dilution Model Be Different For A Private Seller?
How Would I Calculate “break-even Synergies” In An M&a Deal And What Does The Number Mean?
How Do You Account For Transaction Costs, Financing Fees, And Miscellaneous Expenses In A Merger Model?
How Do You Value A Company?

Why Do Goodwill &amp; Other Intangibles Get Created In An Acquisition?

Discussion

No Comment Found

Related InterviewSolutions

Reply to Comment

Why Do Goodwill & Other Intangibles Get Created In An Acquisition?