Goodwill Calculation in Business Acquisitions

Calculating Goodwill in Business Acquisitions

Prev Question Next Question

Question

When a business is acquired, the purchasing company calculates goodwill associated with the acquisition as the difference between the purchase price and the

________.

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

E

Goodwill is the difference between the amount paid for the business and the fair value of this business. The fair value can be calculated using net assets (total assets minus total liabilities), or shareholders' equity.