What is Good will ?

Question

What is Good will ?

Accepted Answer

Goodwill is an intangible asset that represents the value of a company's reputation, brand, and customer loyalty.

Goodwill is recorded on a company's balance sheet when it acquires another company for a price higher than the fair market value of its net assets.
It is calculated as the difference between the purchase price and the fair market value of the acquired company's assets and liabilities.
Goodwill is not amortized but is subject to impairment testing annually to ensure it is not overstated.
Goodwill can also be internally generated through strong customer relationships, brand recognition, and employee expertise.
Examples of goodwill include the Coca-Cola brand, Apple's loyal customer base, and Disney's reputation for quality entertainment.

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