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SashulF [63]
3 years ago
15

What is goodwill in a business sale and why is it amortized in the business financial statements

Business
1 answer:
astra-53 [7]3 years ago
7 0

Answer:

See below

Explanation:

Goodwill arises when is a business is acquired as a going concern. It is an intangible asset of a business. Goodwill represents the value of a company's customer base, its location, any patents, and the brand name. It consists of the value of suppliers, customers, and employee relationships that facilitates the smooth running of the business.

The value of goodwill is the difference between the purchase price and the net cost of its tangible and other intangible assets of a business. Amortization of goodwill means spreading the cost of goodwill to several financial years.

Goodwill is amortized because the business benefits from the goodwill for many years.  In other words, the expenditure on goodwill will profit the company in more than one financial year. As per the matching principle, expenses and incomes should be recognized in the period they occur. As benefits will be enjoyed in many years, the expenses should also be spread in similar years.

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Addison Corporation is considering the purchase of equipment that would increase sales revenues by $250,000 per year and cash op
yaroslaw [1]

Answer:

17.5%

Explanation:

depreciation = 400,000 / 5 = 80,000

return = $250,000 - %100,000 - $80,000 = 70,000

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2 years ago
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2 years ago
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sashaice [31]
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5 0
2 years ago
Read 2 more answers
The set of responsibilities and practices exercised by the board and executive management with the goal of providing strategic d
Solnce55 [7]

Answer:

Governance

Explanation:

Governance -

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Hence , from the information of the question ,

The correct term according to the given statement is governance .

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3 years ago
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spayn [35]

Answer:

To remedy anti-competitive conduct, such as collusion and to control the ability of the incumbent to restrict competition; To protect consumers from anti-competitive practices.

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