amalgamation
This query is : Resolved
04 February 2011
sir
how to treat the goodwill obtained
from the vendor company in the calculation of net assets vale
how to treat the goodwill obtained
from the vendor company in the calculation of net assets vale
CA Nischal Agrawal
(Expert)
04 February 2011
Treatment of goodwill is dependent on the type of amalgamation i.e Pooling of Interest or Purchase method.
1) If pooling of Interest then any goodwill obtained will be adjusted against reserves of the transferee & transferor.
(This does not apply to goodwill purchased outright.)
2)If purchase method then there would be no such adjustment and goodwill will appear in the amalgamated balance sheet.
You can read AS 14 for more precise explanation. AS 14 covers finner details on the treatment which I have not covered above
1) If pooling of Interest then any goodwill obtained will be adjusted against reserves of the transferee & transferor.
(This does not apply to goodwill purchased outright.)
2)If purchase method then there would be no such adjustment and goodwill will appear in the amalgamated balance sheet.
You can read AS 14 for more precise explanation. AS 14 covers finner details on the treatment which I have not covered above
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