Fall 2016 #18b
In the examiner's report for b, the answer for how to calculate goodwill is "Goodwill under SAP is purchase price less surplus of acquired entity. It is amortized over the time the acquiring company benefits from the purchase, up to 10
years". In the battlecard, the calculation of goodwill for SAP is min(10% of the acquiring company's surplus, purchase price less surplus of acquired entity)". How come the cap of 10% of the acquiring company's surplus was left out of this solution?
Comments
It was an oversight of the examiner solution. The 10%-of-surplus cap is stated in the Odomirok text.