Goodwill

What is Goodwill?

Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net assets. It reflects the value of non-physical factors like brand reputation, customer loyalty, employee relations, and intellectual property that contribute to the acquired company’s earning power. Goodwill is recorded only during acquisitions and is tested regularly for impairment rather than amortized.