A company acquires another company for ₹480 crores. The fair value of identifiable net assets of the acquired company is ₹300 crores. What is the goodwill arising from this acquisition?
Answer
₹180 crores
The correct answer is ₹180 crores — Conclude that goodwill = ₹180 crores.
Step-by-step solution
- Identify the purchase price: ₹480 crores.
- Identify the fair value of identifiable net assets: ₹300 crores.
- Compute goodwill as the difference: 480 – 300 = 180.
- Conclude that goodwill = ₹180 crores.
Common mistake: Subtracting liabilities instead of using net assets
Concept tested: Goodwill calculation in acquisition
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