- This topic has 2 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Is the treatment for negative goodwill (bargain purchase) just debit goodwill in the group SFP to clear the negative balance and credit P/L in the group SPLOCI?
Therefore if we are calculating the group SFP and want to know goodwill for an acquisition a few years ago that turns out to be a bargain purchase, no further adjustments need to be made, it was just a bargain purchase so zero goodwill on the SFP?Thanks
Yes, correct. In the year of the bargain purchase the gain is recognised through profit or loss and the goodwill is zero. In subsequent years the goodwill is still zero but just be careful as the gain needs to be shown in the group retained earnings each year, so in the year of acquisition and all subsequent years.
Thanks
P.S. I’ll answer your two other questions from the revision kit later when I’ve access to my revision kit.
- You must be logged in to reply to this topic.