Negative Goodwill

Definition

The excess of the fair value of identifiable net assets acquired over the purchase consideration in a business combination, now termed a bargain purchase gain under current standards. Under IFRS 3, negative goodwill is recognised immediately in profit or loss after the acquirer reassesses the identification and measurement of all assets and liabilities. The term 'negative goodwill' is still widely used in practice, though the accounting standards now refer to it as a gain on a bargain purchase.