Goodwill........?

Question

how do you calculate the goodwill of a certain company?

Answer 1

Under IFRS 3, goodwill is the excess of the cost of the
business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Goodwill acquired in a business combination represents a payment made by the acquirer in anticipation of future economic benefits from assets that are not capable of being individually identified and separately recognised.

Under IAS 28, An investment in an associate is accounted for using the equity method from the date on which it becomes an associate. On acquisition of the investment any difference between the cost of the investment and the investor’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities is accounted for in accordance with IFRS 3 Business Combinations. Therefore:

(a) goodwill relating to an associate is included in the carrying amount of the investment. However, amortisation of that goodwill is not permitted and is therefore not included in the determination of the investor’s share of the associate’s profits or losses.
(b) any excess of the investor’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the investor’s share of the associate’s profit or loss in the period in which the investment is acquired.

Answer 2

I suppose if you have the total asset of a company, e.g., if the share price is $5, total share capital is 1 Million. Total value of company is $5 Million (a simple view). If the tangible assets of the company (property, debts, loans, cash, get it from a Company report), is $4 Million, then Goodwill should be $1 Million. Well, roughly like that. I might have missed a few details.

Answer 3

i think u use a calculater...just trying to ern points and i say Goodwill and thats a store so sorry ma'am person lol