Accounting – Goodwill
Articles
What Is Goodwill and Why Does It Get Impaired?
A plain-English guide to how goodwill is created in an acquisition, why it isn't amortized, and what actually triggers a goodwill impairment charge.
How to Answer the Goodwill Impairment Interview Question
A step-by-step framework for answering the classic goodwill creation and impairment interview question, including the 3-statement walk-through interviewers listen for.
What Is Purchase Accounting? Goodwill, Step-Ups, and the Deferred Revenue Haircut Explained
A plain-English guide to purchase accounting (ASC 805 / IFRS 3): how fair value step-ups, deferred tax liabilities, goodwill, and the deferred revenue haircut work after an M&A deal closes.
How to Answer a Purchase Price Allocation Interview Question (Step-by-Step Framework)
A step-by-step framework for answering purchase accounting and purchase price allocation interview questions, with a worked goodwill and deferred tax liability example.
What Is Purchase Price Allocation (PPA)? Goodwill, Step-Ups, and Why It Matters
A plain-English guide to purchase price allocation in M&A: how goodwill and fair value step-ups are created, why goodwill isn't amortized, and how PPA flows through the financial statements.
How to Answer a Purchase Price Allocation (PPA) Interview Question
A step-by-step framework for answering PPA interview questions: computing fair value step-ups, goodwill, and the earnings impact of incremental D&A — with the tax nuance interviewers listen for.
Cases
Goodwill: Creation and Impairment
Walk me through how goodwill is created in an acquisition, when a company needs to write it down, and what happens across the financial statements when it does.
Purchase Accounting After an Acquisition
As an M&A analyst, you are tasked with walking through the purchase accounting for an acquisition — calculating the fair value step-ups, the deferred tax liability they create, the resulting goodwill, the incremental amortization burden, and the deferred revenue haircut's impact on post-close revenue.
Purchase Price Allocation (PPA)
As a junior M&A analyst, you are tasked with performing the purchase price allocation (PPA) for a recent acquisition — determining how much of the purchase price creates goodwill versus fair value step-ups, and quantifying the amortization burden those step-ups place on the combined company's future earnings.