Goodwill on purchase
I'm in the process of preparing first year accounts for a external stakeholder, I need to prepare accounts for individual companies as well as consolidated financial statements.
A client of mine has purchased company x for £420,000, the net assets of this company at acquisition date were £240,000 this included goodwill for £250,000.
Secondly company x shares were brought by a clients holding company (y) via business loan in which he owns all issued shares.
I have a number of questions which I require clarification for please.
The first one involving company x when preparing individual financial statements, do I include the total goodwill of £250,000 in balance sheet or do I elminate it against the reserves?
My second question is in company Y (holding company) balance sheet I have shown purchase of company x as a Investment of £420,000, is this the correct treatment?
Finally when preparing consolidated accounts goodwill on acquisation will be £180,000 or do include £250,000 as well which will create total goodwill of £430,000, which become more than cost price of £420,000?
I would be grateful if any consolidation experts could add some light to this, company x £250,000 goodwill is causing me big issues, as I have not come across this in long time. All suggestions would be highly appreciated.
- Property versus Trade in a Ltd Company 259 13
- s.755 ITA 2007 Gains on transactions in land 125 2
- Who picks up the slack? 1,336 8
- How do I clear transaction history - Sage 50 v9 231 6
- VAT on part of a closed pub 227 14
- CA self-employed income below personal allowance 32 1
- Whats the best way to keep my accounts? 479 15
- HMRC corporation tax software - how to enter negative expense 262 8
- Dispensation pointless ? 519 14
- Snotty HMRC letter - continued 806 19
- Flat rate vat error 289 6
- can I claim a per diem 222 4
- Underpaid taxes included in tax code connundrum 143 3
- Linux Accounting Software 553 13
- RTI due -no broadband 131 1
- Dividend paid to non-shareholder 469 12
- Shareholders selling shares to shareholders, how to account for it? 89 1
- Is Hold over relief available? 110 4
- Personal returns late information - when to get tough? 883 10
- Playstation 4 - Allowable expense or not? 2,200 27
- Desperately seeking Susan, Sam or anyone with any other name 818
- Experience with Islamic investor following Sharia-compliant rules? 500
- Darwinpay Partnership Assessment 315
- How to format a stock book 279
- S464A Charge to tax: conferring benefit & BIK 224
- Tax efficient holding company structure 218
- Investment property company accounts template 213
- Outlook 2007 with business contact manager not loading on new laptop 207
- auto enrolment - calculation of first pension deduction 179
- Sage 50 Customer Statements and Running Balances 176