In the context of amalgamation, what is goodwill?

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Q: In the context of amalgamation, what is goodwill?

Solution: Goodwill is defined as the excess of the purchase price over the fair value of the net identifiable assets acquired in an amalgamation.

Steps: 6

Step 1: Understand what amalgamation means. It is when two or more companies combine to form a new company.
Step 2: Know what 'purchase price' is. It is the amount of money paid to buy the company.
Step 3: Learn about 'net identifiable assets.' These are the things the company owns that can be easily valued, like cash, buildings, and equipment.
Step 4: Understand 'fair value.' This is the estimated worth of the net identifiable assets at the time of the amalgamation.
Step 5: Calculate the excess amount. Goodwill is the difference between the purchase price and the fair value of the net identifiable assets.
Step 6: Remember that goodwill represents the intangible value of a company, like its brand reputation or customer relationships.