Goodwill as Measured by Customers
Goodwill is the value of a business entity not directly attributable to its assets and liabilities, i.e., a general term for all the intangibles that go into making a realistic valuation. Simply stated, Goodwill is the difference between the quantitative financial elements of a valuation and the soft, qualitative, image elements that are part and parcel of every company or brand.
Goodwill as Measured in Financial Statements
Goodwill in financial statements is an intangible asset that arises when a buyer acquires an existing business. Goodwill represents assets that are not separately identifiable.
Goodwill does not include:
• Identifiable assets that are capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability regardless of whether the entity intends to do so.
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