Find the premium paid over fair market value in an acquisition — representing brand, customer relationships, and other intangible value.
Total price paid to acquire the business
Fair value of all identifiable tangible and intangible assets
Fair value of all assumed liabilities
Goodwill is the premium paid above the fair market value of net identifiable assets during an acquisition. It reflects brand value, customer relationships, and other intangible benefits.
Goodwill
Negative = Bargain Purchase
Net Assets (FMV)
Goodwill as % of Purchase Price
Goodwill is recorded as an intangible asset on the balance sheet and tested annually for impairment.
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