Entity A acquires Entity B for 50 million, of which 35 million is the fair value...

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Entity A acquires Entity B for 50 million, of which 35 million is the fair value of the identifiable assets acquired and liabilities assumed. The acquisition of B Ltd. is to be integrated into two of Entity A's CGUs with the net assets being allocated as follows: Fair value of acquired identifiable tangible and intangible assets CGU 1 25 in million Total 35 CGU 2 10 In addition to the net assets acquired that are assigned to CGU 2, the acquiring entity expects CGU 2 to benefit from certain synergies related to the acquisition (e.g. CGU 2 is expected to realise higher sales of its products because of access to the acquired entity's distribution channels). There is no synergistic goodwill attributable to other CGUS. Entity A allocated the purchase consideration of the acquired business to CGU 1 and CGU 2 as 33 million and 17 million respectively. Determine the allocation of goodwill to each CGU? Entity A acquires Entity B for 50 million, of which 35 million is the fair value of the identifiable assets acquired and liabilities assumed. The acquisition of B Ltd. is to be integrated into two of Entity A's CGUs with the net assets being allocated as follows: Fair value of acquired identifiable tangible and intangible assets CGU 1 25 in million Total 35 CGU 2 10 In addition to the net assets acquired that are assigned to CGU 2, the acquiring entity expects CGU 2 to benefit from certain synergies related to the acquisition (e.g. CGU 2 is expected to realise higher sales of its products because of access to the acquired entity's distribution channels). There is no synergistic goodwill attributable to other CGUS. Entity A allocated the purchase consideration of the acquired business to CGU 1 and CGU 2 as 33 million and 17 million respectively. Determine the allocation of goodwill to each CGU?

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To determine the allocation of goodwill to each CGU Cash Generating Unit we can use the relative ... View the full answer