If a company buy asset of another company and customer list with more than the fair value of asset what will be the treatment?
Happyfly Wrote: ------------------------------------------------------- > If a company buy asset of another company and > customer list with more than the fair value of > asset what will be the treatment? depends on the nature of the asset, if its the operations of another company you can bookk the purchase descrepancy to goodwill.
seanc is right about the pruchase of a business unit - Purchase price less (FV Assets - FV Liabilties) = goodwill As far as physical assets, you have to rephrase the acquisition. The price you pay for the asset awould be the best measure of its “fair value” - regardless of what everyone else thinks. In other words, you will generally list the asset on the balance sheet at the price you paid.
joemontana Wrote: ------------------------------------------------------- > seanc is right about the pruchase of a business > unit - Purchase price less (FV Assets - FV > Liabilties) = goodwill > > As far as physical assets, you have to rephrase > the acquisition. The price you pay for the asset > awould be the best measure of its “fair value” - > regardless of what everyone else thinks. > > In other words, you will generally list the asset > on the balance sheet at the price you paid. That’s true. It is based on FMV depending on the asset type
joemontana Wrote: ------------------------------------------------------- > seanc is right about the pruchase of a business > unit - Purchase price less (FV Assets - FV > Liabilties) = goodwill > > As far as physical assets, you have to rephrase > the acquisition. The price you pay for the asset > awould be the best measure of its “fair value” - > regardless of what everyone else thinks. > > In other words, you will generally list the asset > on the balance sheet at the price you paid. That’s not true. It is based on FMV depending on the asset type