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Question
How Is Goodwill Calculated?
How Is Goodwill Calculated?
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Solution
Goodwill is calculated by subtracting the fair market value of assets and liabilities from the purchase price of the company
Goodwill = P − (A+L)
where,
P = Purchase price of the target company
A = Fair market value of assets
L = Fair market value of liabilities
Also read:
Stay connected with BYJU’S for more such questions and answers on various commerce topics.
Goodwill is calculated by subtracting the fair market value of assets and liabilities from the purchase price of the company
Goodwill = P − (A+L)
where,
P = Purchase price of the target company
A = Fair market value of assets
L = Fair market value of liabilities
Also read:
Stay connected with BYJU’S for more such questions and answers on various commerce topics.
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