Query regarding 'Genuine Equity'
Repayment of shareholder's loans and share based payments - should these be excluded from equity and recorded as a liability as they relate to a debt and/or payment of a debt?? Logic says that this would be genuine equity as it is a repayment therefore putting the value back into the equity bucket. hmmmmm?
My concerns with the Balance Sheet:
Goodwill - the general consensus is that this is an operating activities however I am still of two minds. I can see both sides - goodwill is generated from the acquisition of another entity as is the reside difference between purchase price less recognisable assets and liabilities. It is an intangible asset not derived from your operations namely interaction with customers or suppliers and therefore it feels like a financial type of transaction which would 'store the value' of the difference in price after assets/liabilities.
In saying that, other intangible assets would be associated with everyday operations such as brand names, licences etc. These type of transactions can actually have a price tag assigned once sold as it is the premium you are willing to pay when acquiring a company.
Investment in associate: This looks to be the distribution of shares in an associate company being 'iinet'. This is directly relating to equity so I am going to list it in the financial section - but it is a new term for me so I have to go with my gut on this one.
No comments:
Post a Comment