medium · Investment Banking ma-lbo
What is the proper treatment of a target company's existing Goodwill during a Purchase Price Allocation?
- It is amortized immediately as a transaction expense on the income statement.
- It is carried over to the pro-forma balance sheet and added to the new Goodwill.
- It is revalued to Fair Market Value based on current market multiples.
- It is eliminated and replaced by the new Goodwill calculation.
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