Goodwill: Difference between revisions
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Also known as positive goodwill. | Also known as positive goodwill. | ||
<span style="color:#4B0082">'''''Example: Goodwill'''''</span> | |||
:A 'home grown' star football player should be just as valuable to a club as one who has been bought-in. | |||
:But the balance sheet would only include the bought-in players, not the home grown ones. | |||
:A valuation of the company for sale or purchase should recognise the playing value of all talented players, regardless of whether they were bought-in or home grown. | |||
Revision as of 16:00, 20 May 2020
1.
An intangible asset representing the additional premium - in excess of the value of net assets - paid to acquire control of a business.
Also known as positive goodwill.
Example: Goodwill
- A 'home grown' star football player should be just as valuable to a club as one who has been bought-in.
- But the balance sheet would only include the bought-in players, not the home grown ones.
- A valuation of the company for sale or purchase should recognise the playing value of all talented players, regardless of whether they were bought-in or home grown.
2.
The excess of the total value of the whole business, above the net value of its individual assets and liabilities.
Relevant accounting standards include Sections 18, 19 and 27 of FRS 102.
3.
The positive reputation of a business.
