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How do we adjust for fair values when calculating goodwill if the fair value is less than the carring amount eg if the carring amount is £180000 but the fair value is £135000
Although this situation will not happen in Paper FA, it is exactly the same as in the lecture examples when the fair value is more than the carrying amount.
The goodwill will be calculated using the fair value (of 135,000), and the non-current assets in the SOFP will be reduced by 45,000.
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