Goodwill

the overpayment when buying a business above the value of its net assets

In more detail

The overpayment above the value of the net property of the company that was bought: reputation, customers, the benefits expected from putting the businesses together. It becomes a line among the buyer's property.

It appears because a business is worth more than the sum of its desks and machines. The accounts have to put that difference somewhere.

Covered in the primer of chapter 6.

Where it appears in the course

In the academy “Goodwill” is not a definition but an operation: you post it yourself and watch what it does to the balance sheet.

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