I was re-searching a company's ballance sheet and the listed: Goodwill, Net under total assets ? What is that?

Answer 1

Goodwill is covered by IFRS 3

Recognition and measurement of goodwill : Goodwill is recognised by the acquirer as an asset from the acquisition date and is initially measured as the excess of the cost of the business combination over the acquirer's share of the net fair values of the acquiree's identifiable assets, liabilities and contingent liabilities. [IFRS 3.51]

No amortisation of goodwill : IFRS 3 prohibits the amortisation of goodwill. Instead goodwill must be tested for impairment at least annually in accordance with IAS 36 Impairment of Assets. [IFRS 3.54]

To simplify this, if you bought over a business and its book value is $10k but you paid $12k for it, you've paid for goodwill of $2k.

What you shd do is look for a note number next to the Goodwill item, and turn to the notes to the a/cs and read the note. It'll tell you what the goodwill is all about and how it arose and what's the impairment.

Answer 2

extra money the company had to pay to buy the business from former owner - perceived extra value of customer lists, company reputation, etc - intangible asset amortized over 30 yrs