2007-03-23 06:34:32 · 2 answers · asked by PJ 1 in Business & Finance ➔ Small Business
There is only one way to create goodwill. When a company is acquired for a price exceeding its book value, the difference is called goodwill.
2007-03-23 08:12:34 · answer #1 · answered by NC 7 · 1⤊ 0⤋
"Goodwill" is one of those words that has a different meaning in business and accounting than it does in ..... real life. This can make it a confusing concept.
When valuing a business, people like to see the $ worth of everything. That's fine for buildings, inventory and tangible assets. But businesses have other valuables, such as their customer relationships and supplier loyalties which are more challenging to assess and which may actually make up most of the $ value!
This is where investors and accountants get into "goodwill" discussions.
I have given two links below which you may find helpful.
2007-03-24 14:01:00 · answer #2 · answered by rhrjruk 2 · 0⤊ 0⤋