Goodwill Calculation When Acquired Company has Negative Reserves
If a holding company acquires a subsidary that has negative reserves due to cumulative losses, how is this investment accounted for within the holding company accounts?
Investment £600k (paid from holding company)
Fair value reserves of Subsidary on date of acquisition - £(300k)
Would goodwill in this instance be £900k? (£600 + £300)
If so then what value would be on the Holding company's balance sheet in relation to the investment?