A Co acquires a 60% equity shareholding in B Co. the purchase consideration is $130,000. The fair value of B Co’s net assets at the date of acquisition is $160,000 and their book value is $110,000. The goodwill arising on the acquisition, measured in accordance with IFRS 3 using the purchased goodwill method (Where the NCI is measured at its share of the acquiree's identifiable net assets)
Goodwill is 'an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised' . In simple terms, goodwill is measured as the difference between:
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