Question
ABC Ltd. acquired 80% of the equity shares in XYZ Ltd.
on 1st April 2022 for ₹40 lakh. On the acquisition date, XYZ Ltd. had retained earnings of ₹10 lakh. Calculate the amount of goodwill to be recognised if the fair value of net assets acquired was ₹30 lakh.Solution
Goodwill = Consideration – Parent’s share in net assets = ₹40 lakh – (80% × ₹30 lakh) = ₹40 – ₹24 = ₹16 lakh
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