Purchase of an existing business Flashcards
1
Q
What is the business taken over as?
A
A going concern
2
Q
The purchase of a business can occur when:
A
- ST > ST
- P > ST
- P > P
- LTD > ST
- LTD > P
- LTD > LTD
3
Q
Is the value of an ASSET the same for the seller and buyer?
A
- NO.
- Purchaser will place his OWN values on the assets
- Entered in the PURCHASER’S books
4
Q
What is the difference between the total purchase price and net realisable assets referred to?
A
Goodwill.