Goodwill - limited to 10% of the acquiring company's surplus

nkekarnkekar
in Odomirok.22-23-GAAP

"Only the purchasing company recognizes goodwill, and is limited to 10% of the acquiring company's surplus. "

Does this hold for SAP or GAAP accounting or both? I was confused when looking at the wiki vs. the battle cards

Comments

  • Staff - ACStaff - AC

    It holds for Purchasing GAAP only. The difference of Goodwill under SAP versus GAAP is explained on p331 of Odomirok (Cpt 22).

  • nkekarnkekar

    thanks!

  • Staff - ACStaff - AC

    Sure, good luck.

  • ersers

    I'm a bit confused on this too. The battle card's formula for SAP goodwill is min(P-S2,10%*S1). Wouldn't that imply SAP goodwill is also limited to 10% of the purchasing company's surplus?

  • mnrbermnrber
    edited April 2022
    I’m pretty sure only SAP is capped at 10% of acquiring’s surplus, not GAAP.
  • ersers

    That was my understanding too, with my confusion coming from the quoted sentence above which is found in the Purchasing GAAP section, which makes it sound like the 10% limit also applies to GAAP.

  • Staff - ACStaff - AC

    I re-read that citing, and it looks like 10% of acquiring's surplus cap is only applied to SAP, not Purchasing GAAP. Sorry about the confusion.

  • ersers

    Thanks for the update! Should the purchasing GAAP section be amended?

  • grahamgraham

    I have edited the purchase GAAP section to state that the 10% limit applies only to SAP.

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