How is the carrying amount of goodwill at disposal calculated?

The carrying amount of goodwill at disposal is calculated as the consideration transferred minus the net assets. This method reflects the idea that goodwill represents the excess of the purchase price (consideration transferred) over the fair value of identifiable net assets acquired in a business combination.

When a company disposes of goodwill, it is important to determine its carrying amount accurately to recognize any gain or loss on the disposal. By subtracting the net assets (which include tangible and identifiable intangible assets minus liabilities) from the consideration transferred, you arrive at the goodwill amount associated with that disposal. Essentially, this calculation gives a clear picture of what part of the purchase price was attributed to synergies, brand value, and other intangible elements that are not separately identifiable as net assets.

This approach ensures that the accounting reflects the true economic impact of the disposal transaction. Furthermore, it aligns with the accounting principles governing business combinations, as it emphasizes the relationship between the amount paid to acquire a business and the value of its net assets.