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In december 2014 paper question one
the decrease in fair value of building is added to goodwill. I couldnt think of a logical reason for that. please explain why ..
thank you
Hi,
If the fair value of the asset at acquisition of a subsidiary is lower than their book value then this will reduce the net assets at acquisition. If the net assets at acquisition are lower then the value of goodwill will be higher as we are deducting a smaller net assets figure in our goodwill calculation.
Thanks
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