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Originally Posted by Georgie
Yes, that is what i meant, Goodwill relates to intangibles that CANNOT be capitalized UNLIKE (better word) Patents and Copyrights
the question is, how was the Goodwill created in this case and that is what is confusing me. basically as i understand it, the Govt GAVE GM equity, which created the Goodwill (Amount above FMV of Net Identifiable Assets) which would mean that the govt did in fact purchase GM...
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The government gave old Gm money. When the new GM was formed whatever equity the government had got wiped out. The shares were reissued for the new GM again at a fixed price (really for free) and the associated value was booked to additional paid in capital ( what was in excess of the par value). The equity transactions are described in one of the two filings I linked.
I camt figure out which because I'm on my cell again.
The fact that goodwill arose doesn't mean the government purchased GM... but it does hint at it. From an accounting and qualitative perspective they do.
The goodwill asset was purely a result of fresh start accounting.