Graham Limited acquired 90% of the share capital and reserves of Terry Limited for $340,000. Share capital was $100 000 and reserves amounted to $124 000. All assets and liabilities were recorded at fair value except equipment which was recorded at $60 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The amount of goodwill acquired by Graham Limited in this business combination was:

A Limited acquired 100% of the share capital of B Limited for $765000. B Limited had total shareholder's equity of $400000. Thebook values of B Limited's assets were: buildings $100000, machinery $180000. The fair values of these assets were: buildings6290000. machinery $350000. The tax rate is 30%. The acqisition analysis wil determine goodwill or gain on bargain purchase

X and Y share profits and losses equally. Their fixed capital was ` 2,40,000and ` 1,60,000 respectively. There was also a balance of ` 65,000 in GeneralReserve and revaluation gain amounted to ` 85,000. They admit Z for 1/5thshare who brought ` 1,80,000 as capital.9. Calculate the amount of Goodwill of the firm.

Example 1The following information is given as at 31 March 20X1P Ltd. S Ltd.Non-current Assets:PPE 2,000 500Investment in Subsidiary 1,000Net Current Assets 2,000 5005,000 1,000Issued Capital 500 1,000Reserves and Surplus 4,5005,000 1,000P Ltd. acquired 100% of shares of S Ltd. on 31 March 20X1 for` 1,000.Since P Ltd. has acquired S Ltd., we will have to determine goodwill / capitalreserve. Let us understand why goodwill / capital reserve arises in case ofconsolidation, and what would be the interpretation of the same.© The Institute of Chartered Accountants of IndiaADVANCED ACCOUNTING10.22In the given case, P Ltd. acquired all the shares of S Ltd. by paying` 1,000. Thispayment (i.e., purchase consideration) would be made by P Ltd. to theshareholder(s) of S Ltd. (hence the transfer of this amount would not appear in thebooks of S Ltd.).By paying` 1,000, P Ltd. has acquired ‘control’ over S Ltd. This acqu isition is quitedifferent from the concept of amalgamation done in accordance with AS 14, thoughthe concept of goodwill / capital reserve is similar. Under AS 14, the targetcompany would generally liquidate, and all assets and liabilities would betransferred from the Selling Company to the Purchasing Company. In case ofconsolidation, P Ltd. is acquiring ‘control’ i.e., by way of acquiring equity shares in SLtd.. Thus, S Ltd. continues to exist, and the assets and liabilities of S Ltd. are nottransferred to P Ltd., but instead continue to remain with S Ltd. only. However, sincein substance, acquisition has taken place (albeit through transfer of control), thepurchase consideration of` 1,000 will be compared with the net worth ofS Ltd., which is` 1,000. Since amount paid (i.e., purchase consideration) equals thenet worth, no goodwill / capital reserve is recognized. In case the amount paid (i.e.,purchase consideration) would be higher / lower than the net worth of S Ltd., suchdifference would be recognized in Goodwill / Capital Reserve respectively.

On 1 July 2020, Judds Ltd acquired all the share capital of Solace Ltd for a consideration of $950,000. At the date of acquisition, the fair value of the identifiable net assets of Solace Ltd is $800,000. After the acquisition, the board of directors of Judds Ltd decided to impair goodwill arising from the acquisition by $15,000 for the financial year ended 30 June 2021 and an additional $20,000 for the year ended 30 June 2022. The consolidation adjustment to record goodwill impairment on 30 June 2022 is:

ABC Company has the following assets and liabilities: Carrying ValueFair Market ValueAccounts Receivable500,000450,000Building5,200,0005,800,000Machinery400,000550,000Bonds payable(200,000)(200,000)Assume that a purchaser pays ₱7,000,000. How much is the amount of goodwill if any?