Goodwill
This query is : Resolved
11 June 2011
Dear Expert,
I had a query.
A company X invests Rs.100 in company Y. X takes over Assets (Rs.100)& Liabilities (Rs.50) from Y. Net Assets taken over is Rs.50. So will the balance Rs.50 (paid Rs.100 & Net Assets Rs.50) be treated in his new company as Goodwill as per the entry below?
Assets Debit Rs.100
Liabilities Credit Rs.50
Goodwill Debit Rs.50
Share Premium Credit Rs.100
Kindly advise if other than Goodwill any other entry is an option. Because if we bring in Goodwill same will be subject to Amortization.
Thank you in advance.
Aroop Datta
I had a query.
A company X invests Rs.100 in company Y. X takes over Assets (Rs.100)& Liabilities (Rs.50) from Y. Net Assets taken over is Rs.50. So will the balance Rs.50 (paid Rs.100 & Net Assets Rs.50) be treated in his new company as Goodwill as per the entry below?
Assets Debit Rs.100
Liabilities Credit Rs.50
Goodwill Debit Rs.50
Share Premium Credit Rs.100
Kindly advise if other than Goodwill any other entry is an option. Because if we bring in Goodwill same will be subject to Amortization.
Thank you in advance.
Aroop Datta
11 June 2011
It will be goodwill
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