What is goodwill and when is it on the balance sheet?
Not what you're looking for?
Kallus Corp is an industry leader in the manufacture of toys. Each year, its design staff comes up with new ideas that are a great success. As a result, Kallus sales and profits consistently exceed those of other toy manufacturers. Over the past ten years, Kallus has earned average net profits of $189 million compared to the $122 million for the typical company in the toy industry.
Does Kallus have goodwill? Explain?
Purchase this Solution
Solution Summary
Ah yes, the mystery of "goodwill." Seems this is a sticking point for most students. Finally, an explanation in plain everyday language and an example to show you.
Solution Preview
If you want an ACCOUNTING answer.....
Goodwill as defined by generally accepted accounting principles (GAAP) arises when you purchase a business for more than the fair market value of assets identified. Now, lets parse the techno-babble. What they mean is that they record this strange asset called goodwill when a firm buys ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Lean your Process
This quiz will help you understand the basic concepts of Lean.