Post by
lscfa on Mar 07, 2024 7:43pm
Acquisition synergies
VMD buys HMP for $29M....HMP has book equity of ~ zero => Goodwill of $29M which is tax deductable. If VMD can shield $29M of income at 25% tax rate => effective purchase price of $21.75M
Comment by
JackLambert on Mar 07, 2024 8:22pm
Help me understand. Do we still amortize goodwill or do we just write off its impairment? That whole IFRS thing is very confusing is this a US thing or is it added back in Canada to assess gains.
Comment by
lscfa on Mar 08, 2024 3:46pm
Ask the co.... "Goodwill resulted from a combination of synergies and cost savings, and further expansion into Tennessee, Alabama, and Mississippi. All of the goodwill is deductible for income tax purposes. There are no contingent consideration arrangements included in the transaction."
Comment by
lscfa on Mar 08, 2024 3:48pm
Maybe goodwill not amortized for accounting purposes but is amortized for income tax purposes.
Comment by
JackLambert on Mar 08, 2024 4:43pm
Makes sense. I don't want one of those BS situation where the CRA writes back deductions allowed by the IRS.