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What is Goodwill in Accounting?

August 29, 2021 admin Comments Off on What is Goodwill in Accounting?

When you feel good about something, you’re usually willing to pay more for it. It’s the same concept when a company considers acquiring another. As a result, acquiring companies are often willing to pay a premium on the transaction. That extra is known as goodwill in accounting: the excess amount paid over the net worth of the acquired company.
Goodwill tends to represent the intangible, long-term assets from the acquisition of one company by another. The company’s brand-name best-selling products or its lengthy library of intellectual property. Whether that goodwill will actually amount to the premium paid for it is what …read more […]