Goodwill : Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company. Impairment of Goodwill: It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value. To Determine: The amount of the impairment loss which Incorporation W should recognize.
Goodwill : Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company. Impairment of Goodwill: It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value. To Determine: The amount of the impairment loss which Incorporation W should recognize.
Solution Summary: The author defines goodwill as the excess of cost of an acquired company over the fair value of its net assets.
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
Chapter 11, Problem 11.13BE
To determine
Goodwill:
Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company.
Impairment of Goodwill:
It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value.
To Determine: The amount of the impairment loss which Incorporation W should recognize.