• Goodwill is an intangible asset that accounts for the excess of the purchase price of another company.
  • The elements included in goodwill represent proprietary or intellectual property and brand awareness that are not easily quantifiable.
  • Goodwill is calculated by subtracting the company’s purchase price from the difference between the fair market value of assets and liabilities.
  • Companies are required to review goodwill value in their financial statements at least once a year and reflect any impairment.
  • Goodwill has an indefinite life, while most other intangible assets have a finiteuseful life.