Use this accounting resource to improve your accounting knowledge and bookkeeping understanding. All of these accounting terms have been reviewed and are written so they can be understood for a wide range of accountants, bookkeeppers, cpas professionals.
Please pick a letter to proceed to the terms associated with that letter.
Goodwill is an Other Asset. It is that portion of the purchase price paid for a business that is related to the intangible value of the company. The goodwill of a company may be due to a particularly favorable location; or its reputation in the community; or the quality of its employer and employees. It is calculated by subtracting the value of all net assets received upon purchase of the business from the purchase price. For example, if Company A paid one million dollars for a business that had current and fixed assets with a fair market value of $750,000, then the Goodwill is $250,000.
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