Question

In Purchase method of amalgamation if net asset value exceeds the amount of purchase
consideration then it results into​

Answer 1

It results into goodwill.

• Both assets and liabilities are taken into consideration under this method.
• They are applied to the total of valuable assets in this form of purchasing consideration, and liabilities are then deducted from the total of assets.
• The balance is called reimbursement for goodwill if any additional sum is paid against sales value over and above the net assets.