USA Acquisition - Purchase Price Allocation - negative book value

[Wade Senti]

Hi:

I'm conducting an initial review for an acquisition of a business that has negative book value (shareholder equity).

As example:

Purchase Price = 50
Target assets = 20
Target liabilities = 30
NBV = -10

When allocating amongst the purchase price what would Goodwill be? Generally it's calculated as Purchase Price - NBV = Goodwill, however in this case my Goodwill would be higher than the total purchase price under such equation.

Any thoughts or suggestions?