Quote:
Originally Posted by formare
Schooling - so sit down and take notes... Goodwill is not "people feel good about us". Goodwill is a dollar amount that is equal to the difference between the sale price and the asset value.
You will never ever buy a functioning company for the asset value. You will pay asset plus revenue profitability over time. In this case i suspect the purchase price is based on the determined ipo value and the book price is likely asset value. The goodwill is the difference between those two.
You would only list goodwill during the reporting period for which you are selling your company.
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I thought it was for the buyer. One company buys another and the difference between the price and the total assets was goodwill?
Not the selling company in an IPO....maybe I'm wrong though, been a while.