Brian Stockbridge tomorrow

[forlanssister 3,114]

"fuelled mainly by the release of negative goodwill of over £20m"

 

What the hell is that? Forlan? Anyone?

 

From the accounts:

 

Goodwill

 

Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest (if any) in the entity over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

 

If, after reassessment, the Group's interest in the fair value of the acquiree's identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest in the acquiree (if any), the excess is recognised immediately in the consolidated income statement as a release of negative goodwill.

[Bluedell 5,624]

"fuelled mainly by the release of negative goodwill of over £20m"

 

What the hell is that? Forlan? Anyone?

 

When you buy a company you usually pay more than the total valaue of its assets less its liabilities. You are buying a brand as well as the bricks and mortar. The difference between the value of the assets and the amount paid is the goodwill.

 

We were in the unusual case of paying less than the total of the net assets, which creates negative goodwill. To put it in simplistic terms, we have recognised the amount that was underpaid for the assets of the club as profit.

[Scott7 6,002]

In reality the goodwill of a FC is thepunters who are prepared to turn up week in, week out.

 

I still don't see how goodwill can be negative. Re-valued yes but negative? Contradiction in terms.

[the gunslinger 3,366]

its negative because we gained it for less than it was worth.

[Bluedell 5,624]

In reality the goodwill of a FC is thepunters who are prepared to turn up week in, week out.

 

I still don't see how goodwill can be negative. Re-valued yes but negative? Contradiction in terms.

 

Perhaps it's not the best named concept in accountancy. It's just a term for reflecting the difference when someone pays for something and he pays less than the value of the assets he is buying. Best not to try and rationalise it outside of that if you don't have to.

[Super_Ally 0]

Glad we have people on here who can sift through the jargon and explain it to us plebs!