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Sir in goodwill if transaction cost is given, will we add that transaction cost in consideration paid or cost of investment while calculating goodwill?? Sir plz explain a bit.
No no no 🙂
Transaction costs must be expensed in the parent’s P&L.
If you pay $1 for a (bad) company and you have to pay transaction costs of $40,000:
1. Cost of investment is $1
2. Consideration for goodwill calculation is $1This rule is set out in IFRS 3. Out of interest, other accounting systems would not expense transaction costs
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