- goodwill
- the excess price asked for the sale of a business over the value of its physical assets; an intangible asset, the price of which represents a payment for the existing client base and future profits. Glossary of Business Terms————Excess of purchase price over fair market value of net assets acquired under the purchase method of accounting. Bloomberg Financial Dictionary————The difference between the total value of a business and the value of its net assets in its balance sheet. It represents the ability of the business to generate profits and cash in the future. Dresdner Kleinwort Wasserstein financial glossary————Goodwill is an intangible asset which appears on the balance sheet of newly purchased companies. It is the difference between the amount that a company pays for an investment and its book value. Goodwill payments may be due to the business being in a favourable location, its reputation in the community, or the quality of its employer and employees. The evidence that goodwill exists is the proven ability to earn excess profits.
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ACCOUNTING the value that a business has in addition to the value of its Assets. Goodwill includes things such as the good reputation that a business has, the names of its products, and the good relations it has with its customers:• The sale price also covers the goodwill of the business.
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Goodwill is the excess price paid for a company above the value of its assets and may cover intangible assets such as brand names. It is normally only recognized in the accounts of a company when it acquires another business as a going concern for a price that is higher than the book value of its capital and reserves. Negative goodwill is a gain when the price paid for a company is less than the value of its assets.* * *
goodwill UK US /gʊdˈwɪl/ noun [U]► COMMERCE the value to a company or organization of things that cannot be directly measured, for example, its good reputation or its customers' loyalty: »Charitable endeavours are important to us in terms of goodwill.
► ACCOUNTING the difference between the value of a company's assets and what profit it is expected to make in the future, which is included in the price paid when it is bought or sold: »We expect the business to raise at least $100,000 in goodwill.
Financial and business terms. 2012.
