Why this is mistaken
Force the identifiable-asset and liability schedule to reconcile before the goodwill formula is available. A negative residual triggers reassessment, not an automatic gain.
Where to watch
When this mistake may appear
- An acquisition packet supplies consideration and a list of tangible, intangible, and liability amounts.
Check your work
Your work may contain this mistake if:
- Goodwill is computed from book equity or from an incomplete asset list, with no identifiable-net-asset subtotal.