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Hello Mike!
I hope everything is well with you.Can you please help me understand the situation. We purchased a subsidiary on 1 January 2010. In June 2010 we received additional information in regard to fair value adjustment and contingent liability (say, fair value estimate decreased by $10mils and contingent liability estimate increased by $1 mils).
How we should reflect this change in estimates if:
– our year ends in December and we are doing SoFP for 2010;
– our year ends in May and we are doing SoFP for 2011?The year end review of fair value estimates will take place and the goodwill calculation revised but not to the extent that negative goodwill is created or, if negative goodwill was already the situation, then not to the extent that negative goodwill is increased
Ok?
Mike,
so your answer is that in these both cases we should implement these changes to initial goodwill calculation?
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