What is 'Goodwill'?

Goodwill is an intangible asset associated with the purchase of one company by another. Specifically, goodwill is recorded in a situation in which the purchase price is higher than the sum of the fair value of assets less fair value of liabilities. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Goodwill Goodwill is an intangible asset associated with the purchase of one company by another. Specifically, goodwill is recorded in a situation in which the purchase price is higher than the sum of the fair value of all identifiable tangible and intangible assets purchased in the acquisition and the liabilities assumed in the process. The value of a company's brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology represent some examples of goodwill. Read More » Related to "Goodwill" Goodwill vs. Other Intangible Assets: What's the Difference? Neither goodwill nor other types of intangible assets possess physical substance. Yet, they are quantifiable, and of great importance to any business. Read More » How to Calculate Goodwill Goodwill is an intangible asset for a company, such as a brand name or intellectual property. There are two ways to calculate its value, a need which often arises when one firm buys another firm outright, or an aspect of another's operations. Read More » How Does Goodwill Amortize? Learn about the Financial Accounting Standards Board's (FASB) rules for goodwill amortization, how the rules have changed and the exceptions. Read More » Related Definitions Goodwill Impairment Goodwill impairment is goodwill that has become or is considered to be of lower value than at the time or purchase. Read More » Intangible Asset An intangible asset is an asset that is not physical in nature and can be classified as either indefinite or definite. Read More » Book Value An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its accumulated depreciation. Read More » Proprietary Technology Proprietary technology is the combination of tools, processes and unique capabilities businesses develop or acquire to gain a competitive edge. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy