The Vasquel group acquires 100% of Obrevain for consideration of 12,000,000. The identifiable assets acquired and liabilities assumed, measured at fair value, represent net assets of 9,800,000 before deferred tax; the fair value adjustments create taxable temporary differences of 1,600,000, the tax bases being unchanged. Tax rate: 25%. Teaching assumption: goodwill = consideration − identifiable net assets (no non-controlling interests). Compute goodwill.
- Consideration transferred
- 12,000,000
- Net assets at fair value before deferred tax
- 9,800,000
- Taxable temporary differences
- 1,600,000
- Tax rate (%)
- 25 %