Goodwill is the reputation earned by the business by providing high-quality goods or services. It can be measured in monetary terms if an entity is willing to purchase another entity and agree to pay over and above the net assets acquired.rnGoodwill got recognized for the first time in books of purchasing entity.rnInternally generated goodwill has no value since there is no basis of recognition.rnHowever, purchased goodwill gets recognition since it is measured in a business environment.rnGOODWILL CALCULATION METHODrnPurchased goodwill is applicable under IndAS 103 business combinations, wherein all the assets & liabilities of the subsidiary are measured at fair value on the date of acquisition, with close identification of assets being recognized for the first time on the valuation of net assets.rnDeferred taxes are calculated on the increase/decrease in the valuation of net assets.rnThe goodwill calculated is not amortized and tested for impairment annually, regardless of indicators of impairment.rnThe pooling of interest method is allowed only in case of common control transactions, where there is no transfer of control and comparing the purchase consideration with book values of assets/liabilities to calculate goodwill.rnBrowse the video and learn Goodwill Calculation –rnJoin International Financial Reporting Standards online classes at Takshila Learning by ACCA Amit Kumar.rnWhen goodwill gets recognized?rnThe excess of purchase consideration over the fair value of the net assets of the subsidiary is recognized as goodwill. For example,rnHelp humans acquired 75000 shares of IndAS rocks Co. by paying cash of Rs. 20,000. They exchanged 1 share for every 3 shares acquired in IndAS rocks Co. The fair value of Helphumans.org share was Rs. 3 per share.rnCost of considerationrnCash 20,000rnShare exchange 1/3*75000*3 75,000rnThe fair value of Net assets acquired 90,000rnGoodwill 5,000rnTO KNOW MORE ABOUT GOODWILL CALCULATION VISIT TAKSHILA LEARNING…..rnInd AS 38 — Research and Development — INTANGIBLE ASSETSrn5 Steps to prepare for clearing Dip IFRrnTakshila Learning provides DipIFR Course Online, so start your preparation for ACCCA Certification today.rnRegister @www.takshilalearning.com and prepare yourself for DipIFR ACCA Certification now with our IFRS course online by expert faculty ACCA Amit Kumar.rnCall at 8800999280 / 8800999283 / 8800999284