Company A purchased company B for $50,000,000. Company B had net assets of $30,000,000, therefore $20,000,000 was paid in excess of the fair value of the net assets. What does this $20,000,000 premium paid by company A represent? In other words, what is this called?
Company A purchased company B for $50,000,000. Company B had net assets of $30,000,000, therefore $20,000,000 was paid in excess of the fair value of the net assets. What does this $20,000,000 premium paid by company A represent? In other words, what is this called?
Chapter12: S Corporations
Section: Chapter Questions
Problem 15CE
Related questions
Question
Company A purchased company B for $50,000,000. Company B had net assets of $30,000,000, therefore $20,000,000 was paid in excess of the fair value of the net assets. What does this $20,000,000 premium paid by company A represent? In other words, what is this called?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT