The November 16, 2011, edition of the Wall Street Journal Online contains an article by Maxwell Murphy
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Instructions
Read the article and answer the following questions.
(a) What do the 51 companies referred to in the title have in common? What implications does this have regarding the fair value of a company's assets?
(b) What significance does the common trait referred to in part (a) have for a company's goodwill?
(c) How does a company get to record goodwill on its books-that is, what must have occurred for goodwill to show up on a company's books?
(d) If these companies write down their goodwill, will this reduce their cash?
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
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Step by Step Answer:
a All of the companies have market values that is the total market price of all of their shares ...View the full answer
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