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Included within the intangible assets of Sumo Ltd (at the acquisition and reporting date) is goodwill of $ 40,500 that arose on the purchase of the trade and assets of a sole-trader business.
Which workings is affected by this please?
Will this affect workings 2 under net asset of S at acquisition date and to be added under goodwill calculation under workings 3 please?
Hi,
We cannot include the goodwill in this instance as we do not know its value. It is therefore removed from the net assets working by deducting the net assets. This then automatically feeds into the goodwill calculation where we are using the net assets of the subsidiary at the acquisition date.
Thanks
Hi, I still not understand.
Does it mean we have to remove the goodwill in the workings 2 of net asset of S at AD and RD? And as a result impact the workings on goodwill as we have to deduct the net assets of S at AD please?
Correct! Yes, we deduct this value from the net assets at both the acquisition date and reporting date.
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