Definition of Goodwill:
Assumed value of the attractive force that generates sales revenue in a business, and adds value to its assets. Goodwill is an intangible but saleable asset, almost indestructible except by indiscretion. It is built painstakingly over the years generally with (1) heavy and continuous expenditure in promotion, (2) creation and maintenance of durable customer and supplier relationships, (3) high quality of goods and services, and (4) high quality and conduct of management and employees. Goodwill includes the worth of corporate identity, and is enhanced by corporate image and a proper location. Its value is not recognized in account books but is realized when the business is sold, and is reflected in the firms selling price by the amount in excess over the firms net worth. In well established firms, goodwill may be worth many times the worth of its physical assets. GAAP require the firms purchaser to write off (amortize) the amount paid as goodwill over a period (usually 10 to 30 years) for financial reporting purposes.
The process for calculating goodwill is fairly straightforward in principle but can be quite complex in practice. To determine goodwill in a simplistic formula, take the purchase price of a company and subtract the net fair market value of identifiable assets and liabilities.
Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, goodwill is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists.
Synonyms of Goodwill
BOMFOG, Benthamism, Christian charity, Christian love, Abetment, Acquiescence, Advocacy, Aegis, Agreeableness, Alacrity, Altruism, Amenability, Amity, An in, Ardor, Auspices, Backing, Beneficence, Benevolence, Benevolent disposition, Benevolentness, Bigheartedness, Brotherly love, Care, Caritas, Championship, Charitableness, Charity, Cheerful consent, Comity, Compliance, Consent, Cooperativeness, Countenance, Custom, Dispatch, Do-goodism, Docility, Eagerness, Encouragement, Enthusiasm, Expedition, Favor, Favorable disposition, Favorable regard, Favorableness, Fellow feeling, Flower power, Forwardness, Fosterage, Friendliness, Friendly relations, Friendship, Gameness, Generosity, Giving, Good graces, Good name, Good terms, Good understanding, Grace, Greatheartedness, Guidance, Harmony, Helpfulness, Humanitarianism, Interest, Kindliness, Kindness, Largeheartedness, Love, Love of mankind, Mutual regard, Patronage, Philanthropism, Philanthropy, Pliability, Pliancy, Promptitude, Promptness, Rapport, Readiness, Receptive mood, Receptiveness, Receptivity, Regard, Repute, Respect, Responsiveness, Right mood, Seconding, Sponsorship, Sympathy, Tolerance, Tractability, Trade, Tutelage, Ungrudgingness, Unloathness, Unreluctance, Utilitarianism, Welfarism, Well-disposedness, Willing ear, Willing heart, Willingness, Zeal, Zealousness
How to use Goodwill in a sentence?
- The companys new owners were pleased with its high level of goodwill , as it would be easier to keep a customers loyalty than to earn it.
- Companies are required to review the value of goodwill on their financial statements at least once a year and record any impairments. Goodwill is different from most other intangible assets, having an indefinite life, while most other intangible assets have a finite useful life.
- Items included in goodwill are proprietary or intellectual property and brand recognition, which are not easily quantifiable.
- Goodwill is an intangible asset that accounts for the excess purchase price of another company.
- Your goodwill will someday return to you so perhaps you should be good to others and do unto them as you would have them do unto you.
- Goodwill is calculated by taking the purchase price of a company and subtracting the difference between the fair market value of the assets and liabilities.
- The company cares about goodwill so they honored the exchange with out a receipt which made me feel really great and thankful.
Meaning of Goodwill & Goodwill Definition