KGIC Inc LGLTF

Acquisition differential said it all

[smcapinvestor]

Any time you make an acquisition and pay more than the book value of the firm (corporation) the excess is whats called the acquisition differential in accounting. You look to assign this differential to any assets or liabilities that may be greater or less than book value ( fair value increments). If you can't assign the extra consideration over book to those items, it becomes goodwill.

This company made acquisition after acquistion where the biggest asset obtained by far was goodwill. This should send a shiver down your spine. They weren't buying anything real, just goodwill and intangbiles with a sprinkiing of real tangible assets.

Clearly the management vastly overpaid (which is obvious from the GW already mentioned) for these acquisitions and the goodwill was impaired almost from the outset.

Hopefully the people responsible for making these deals never work in business again as they were clearly extremely miscalculated.