2016.Fall #18 - GAAP Goodwill using cost-of-capital approach
I do not understand for the Cost of Capital Approach why we take the average of C0 and C1 in the SAP_GAAP_1(v4) excel files - solutions. cells O27-V32.
IT says the capital required at year end is 50% of the unpaid, but if C0 = 135 at the beginning of the year, why are we including half of that for the first CY year end? Why wouldn't it just be C1 not the average of C0 and C1?
Can someone please explain in further detail why we take half of the 160 paid losses during CY for the year end required capital held? I don't understand this concept.
Comments
This is how it is done in Table 108 of Odomirok.