economicz

Dreary Wrote:
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> Please confirm.
>
> Bought 30% of company with net assets BV = $1.2M,
> FV=$1.5M, and paid $500k.
>
> Goodwill under equity method is $500k - 0.30*$1.2M
> = $140k
>
> If you bought 90% of company, then Goodwill under
> acquisition method = $1.5M-$1.2M $300k.
>
> Is this correct?

Goodwill under equity method is as follows:
Purchase price = 500k
Acquired equity = 120 x 0.3 = 360k
Excess purchase price = 140k (500-360)
Attributable to other assets = (1.5-1.2)x0.30 = 90k
Goodwill = 140-90 = 50k

Goodwill under acquisition.
Under Partial Goodwill
You will need to how much the company was purchased for its share of 90%

Under Full Goodwill
You will need to know what is the fair market value of the subsidiary