Typically, a vendor will seek to attribute a higher value to the goodwill apportionment as there may be CGT concessions available, whereas a purchaser will seek to attribute a higher value to the equipment apportionment, as this may allow for greater deductions for depreciation.
Vendor
Case 1. Business Sales 1M / P & E(Cost Base) 0.4M = 0.6M Capital Gain(Goodwill)
Case 2. Business Sales 1M / P & E(Cost Base) 0.2M = 0.8M Capital Gain(Goodwill)
Why do vendors seek to attribute a higher value to the goodwill apportionment?
As I think, more plant and equipment is better.
514 views
514 views1 replies
1 replies
514 views
1 replies