WAEC - Accounts Principles Of Accounts (2024 - No. 34)
Purchased goodwill is purchase consideration less the value of
gross identifiable assets.
net identifiable assets.
gross non-current assets.
current assets.
Explanation
Purchased goodwill is calculated as the difference between the purchase consideration (the amount paid to acquire a business) and the net identifiable assets (the fair value of the acquired assets minus liabilities). This goodwill represents the intangible advantages of the business, such as brand reputation, customer loyalty, and operational efficiencies.
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