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    azcheer's Avatar
    azcheer Posts: 1, Reputation: 1
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    #1

    Jul 16, 2007, 12:12 PM
    Negative goodwill
    How is negative goodwill recognized on a consolidated balance sheet?
    richsaha2007's Avatar
    richsaha2007 Posts: 53, Reputation: 6
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    #2

    Jul 17, 2007, 10:25 AM
    Quote Originally Posted by azcheer
    How is negative goodwill recognized on a consolidated balance sheet?
    When a company purchases another company below the fair value they have a negative goodwill. The difference between the book value of the company and the money paid creates the negative goodwill. The negative goodwill reduces certain assets acquired (I believe it is just the long assets that are reduced). If any remaining credit exists (which is rare), it is accounted for as an extraordinary gain.

    This is for the purchase method
    akramazeem's Avatar
    akramazeem Posts: 1, Reputation: 1
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    #3

    Dec 26, 2010, 08:57 PM
    The amount of negative goodwill will be treated as capital reserve in balance sheet
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