What Is Goodwill?

Goodwill is when a company purchases some other corporation for greater than the value of its property—that's quite common—the difference is recorded as an asset named “goodwill.”

This isn't a popular time period for the fee of a logo, for example, but a very unique accounting time period.

For example, if one business buys every other commercial enterprise for $1 million then it desires to show the $1 million spent as an asset. If there are best $500 thousand in actual assets, the accounting end result must be $500,000 in real assets bought and any other $500,000 in “goodwill.”