COMPLEX TERMINOLOGY
The type of goodwill arising when the purchase consideration is paid above the fair value of net assets, not the book value.
Purchased Goodwill
The side of the vendor’s capital account on which a profit on realization is recorded.
Credit Side
Shares issued at a premium mean this account (other than share capital) is also credited.
Share premium
Vendor receives cash $80,000, shares $110,000, but purchaser also takes over vendor’s liability of $30,000. Calculate purchase consideration.
$220000
The value agreed between vendor and purchaser for an asset, which may differ from carrying amount
Fair Value
An asset with a book value of $60,000 is taken over at $48,000. The realisation account records:
credit the asset $60,000, debit realisation loss $12,000
Purchase consideration is:
Cash paid: 20,000
Shares issued (40,000 shares at $2 par, $3 issue): 120,000
Debentures issued at 10% discount: 27,000
Total purchase consideration = $167,000
A document showing the detailed breakdown of assets and liabilities being taken over.
Schedule Of Non-Current Assets
Name all the countries with North,South,West and East
East Timor
South Korea
North Korea
North Macedonia
South Sudan