thank you for this explanation. I was so confused reading this in the book "If the purchase price is greater than the acquirer’s interest in the fair value of the identifiable assets and liabilities acquired, the excess amount is recognized as an asset, described as goodwill." And then i found this video which is sooo better
No. Imagine a box with 750 dollars out of which 250 dollars don't belong to the company. So if one is buying the box he will pay the company 500 dollars which is the net asset value. 500 dollars is what belongs to the company.
net asset value = asset - liability, and debt is considered as a liability. So, if B's net asset value is $500 and company A ended up paying $1000 because of net asset value + tangible assets, etc. Company A will receive $500 in good will
Wow through my 4 years of college i don’t think i ever understood it as clearly as i did here 😂
That’s true
thank you for this explanation. I was so confused reading this in the book "If the purchase price is greater than the acquirer’s interest in the fair value of the identifiable assets and liabilities acquired, the excess amount is recognized as an asset, described as goodwill."
And then i found this video which is sooo better
One of the great vedio ever seen on this topic
This follows up your GE video nicely. Further explained how GE's earnings will be hurt by goodwill impairment.
Thanks!
Thank you! This is truly well explained...
Amazingly well explained.
What a great explanation! Well done.
Great explanation, thank you
can you please do a video how to post it and why the equity of the bought company is not taken over by the mother company?
Thank you for your clear explanation.
Very good explanation! Thank you
Superb easy to understand! Thank you so much
Very well explained!! Thank you
nicely explained...great
Great Video!!
Excellent video...nicely explained.
Thanks !
when company A buys company B, A isn't responsible for B's debt? So A is going to pay $1000 millions instead of $500 millions?
No. Imagine a box with 750 dollars out of which 250 dollars don't belong to the company. So if one is buying the box he will pay the company 500 dollars which is the net asset value. 500 dollars is what belongs to the company.
net asset value = asset - liability, and debt is considered as a liability. So, if B's net asset value is $500 and company A ended up paying $1000 because of net asset value + tangible assets, etc. Company A will receive $500 in good will
BBBanger!