You are the controller of Software Company, a distributor of computer software
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You are the controller of Software Company, a distributor of computer software

Case .2

You are the controller of Software Company, a distributor of computer software, which is planning to acquire a portion of the net assets of a product line of Midge Company, a competitor enterprise. The projected acquisition cost is expected to exceed substantially the current fair value of the identifiable net assets to be acquired, which the competitor has agreed to sell because of its substantial net losses of recent years. The board of directors of Software asks if the excess acquisition cost may appropriately be recognized as goodwill.

Instructions

Prepare a memorandum to the board of directors an answer to the question, after consulting the guidelines issued by either FASB or IASB.

Hint
Accounts & FinanceAsset worth less liability equals a company's net assets. (Total Fixed Assets - Total Current Assets) - (Total Current Liabilities - Total Long-Term Liabilities) is the formula used to determine it....

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