As part of the negotiations for the Barbados deal, the following was agreed And we're asked to calculate the premium paid above book i.e. Goodwill In order to that, we need to find the difference between our equity purchase price and shareholders' equity at fair value at the deal date And we haven't got that given to us at the moment, we'll have to calculate that If I can find the difference between equity purchase price and equity at fair value, then I'll have my goodwill So first of all the equity purchase price (given to us right at the top) 250 But I now need to work out how to get to shareholders' equity at fair value Well what have we got? We've got shareholders' equity at deal date (so that's book value) And then we've got a few revaluations You've got property on the balance sheet and then you've got market value of property and there's an increase So we need to include those increase in our fair value of equity So we start of with shareholders' equity on the balance sheet at deal date We will then look for a step up of the value of property to fair value and a step up of the brands Let's see if we can calculate them So shareholders' equity was 160 And now let's see how much property has increased in value by It's gone up to 55 from an original balance sheet value of 40, so we need the increase to be included Also what about brands? Well brands, they were in at zero and they've increased to 20 so we need to include that increase, that's not already reflected If I now add up the items above, I've now got the market value of equity and it comes to 195 Great! So the difference between the equity purchase price of 250 and the shareholders' equity at fair value at the deal date f 195 gives us deal goodwill (the premium paid) of 55