Measuring Goodwill in Accounting

The video tutorial explains the concept of goodwill in accounting, which arises when a company is acquired for more than its identifiable fair market value. It details the calculation of goodwill by identifying the consideration paid and the fair market value of acquired assets, accounting for liabilities, and recognizing potential gains or losses. Additional considerations include employee awards and impairment of goodwill due to market changes. The tutorial provides a comprehensive understanding of how to measure and account for goodwill on the balance sheet.

What is the significance of recognizing gains or losses in goodwill transactions?

What happens if there is impairment to goodwill after an acquisition?