THE PLAYGROUND
What did the buyer pay for?
Purchase price is allocated, not guessed.
LIVE EXPERIMENT
What did the buyer pay for?
Acquisition goodwill100
Before you move a sliderDoes a higher fair value for identifiable assets increase or decrease goodwill?
Goodwill = price 300 − (assets 280 − liabilities 80)
READ THE MECHANISM
Goodwill is a residual after identifying acquired assets and liabilities at the required values. Later impairment reduces goodwill and income without a new acquisition cash payment. Tax deductibility does not automatically follow the book charge.
Model assumptions & units
Hypothetical $m. Simple 100% acquisition; no NCI, prior interest or deferred taxes. Later impairment uses a simplified US GAAP reporting-unit comparison, limited to goodwill. A bargain result requires reassessment before recognizing a gain.