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Yeah, that's all well and good. But then after I acquire your company, I get to use that goodwill cost to offset other, unrelated losses. It seems counterintuit
by TechBro8615 3y ago
Yeah, that's all well and good. But then after I acquire your company, I get to use that goodwill cost to offset other, unrelated losses. It seems counterintuitive, because I could overpay for your company, and then hide my existing losses by covering them with the "goodwill" premium I paid to you. In that situation I'm running a bad business: I was losing money, and I overpaid for an acquisition. But the goodwill makes it look on paper as if I've increased my total assets when really I'm just burning cash.
- CamelCaseName 3y agoUh?? Yes, your goodwill went up, but your cash went down? Assets are constant? And then in one year you'll need to take an impairment charge?
- TechBro8615 3y agoYes, that's my point. It's hand wavy and subject to manipulation. Hence why I called it "suspect." (And there's no need for the "Uhh??" tone, this isn't Reddit.)