Financial Rporting

chandniwadhwani92
Finance Junkie
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Financial Rporting

Postby chandniwadhwani92 » Sun Nov 16, 2014 8:50 pm

Goodwill is created in purchase acquisition
What does it mean?

Since goodwill is no amortized but must be tested for impairments at least annually. If impaired goodwill is recognized and loss is recognized in the income statement. IMPAIRMENT COST DOES NOE EFFECT CASH FLOW, AS long as goodwill is not impaired it can remain on balance sheet indefinitely.

what does it mean

edupristine
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Financial Rporting

Postby edupristine » Mon Nov 17, 2014 7:39 am

1) Acquisition can only create goodwill also refer to premium buying.

2) Goodwill can't be impaired to Zero. Yes companies must be tested for impairment at least annually because it will give the real picture of goodwill amount, we recognize the losses in income statement only.

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

Financial Rporting

Postby chandniwadhwani92 » Mon Nov 17, 2014 9:41 am

Goodwill cant be impaired to zero means

edupristine
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Postby edupristine » Wed Nov 19, 2014 7:51 am

It always has some value in market.


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