Mergers & Acquisitions

The first 200 words of this essay...

Mergers & Acquisitions

How will goodwill impact the balance sheet of the combined entity after the merger and acquisition is completed?

Answer: If the cost of purchase is higher than the value of the entity which is purchase by the entity, the value of the goodwill will be increased. Hence, in the combined balance sheet the goodwill will be shown as an increased value which will be extra of the payment that the acquisition company has paid to the acquired company. The value of the goodwill will be as on the date of acquisition. The goodwill will increase the intangible asset of the combined entity.

How do increase revaluations of fixed assets and other intangibles assets (patents and trademarks impact combine d balance sheet?

Answer: As the fixed assets and other intangibles asset are revaluing - those will increase the value of the assets of the acquiring company. The purchase value of the acquiring entity will be determined accordingly. So the assets will be revalue and thus in the combined balance sheet will be shown at revalue price. The goodwill will b determined at the price paid over the revalue assets less liabilities of the acquiring