- Negative goodwill (NGW) refers to the amount of bargain money paid when a company acquires another company or its assets.
- Negative goodwill indicates that the selling party is in distress and must sell its assets for a fraction of their value.
- Negative goodwill almost always favors the buyer.
- Buying parties must declare negative goodwill in their income statements.
- Negative goodwill is the opposite of goodwill when one company pays a premium for another company’s assets.
- Goodwill/goodwill reporting is subject to generally accepted accounting standards (GAAP).