Goodwill and Bargain Purchases
Calculating Goodwill
Goodwill represents future economic benefits arising from assets that cannot be individually identified. It equals consideration transferred plus the fair value of any noncontrolling interest and previously held equity interest, less the fair value of identifiable net assets acquired.
Note
Goodwill is not amortized but must be tested periodically for impairment.
Summary
Correct goodwill computation is one of the most frequently tested CPA consolidation topics.