In accounting, goodwill is an intangible asset that reflects the value of a company's brand, reputation, and customer relationships. It's recorded on a company's balance sheet when one company buys another for more than the fair market value of its net assets. Here are some things to know about goodwill: *How it's created* Goodwill is created when a company pays more than the fair market value of another company's net assets. The buyer believes the acquired company has valuable intangible assets that will provide future economic benefits. *How it's treated* Goodwill is treated differently from other assets because it doesn't have a discernible useful life. Instead, it's periodically tested for impairment. If goodwill is impaired, its value must be written off, which reduces the company's earnings. *How it's valued* Goodwill can be valued using the average profits method, the super profits method, or the capitalization method. *How it's important* Goodwill is important because it reflects the non-physical attributes that add value to a business. It can enhance business value, customer loyalty, and brand reputation. *How it's different from negative goodwill* Negative goodwill is when a company acquires another company for less than fair market value. This often happens when the company being acquired is trying to liquidate assets or has gone bankrupt.
What does goodwill means?
In accounting, goodwill is an intangible asset that reflects the value of a company's brand, reputation, and customer relationships. It's recorded on a company's balance sheet when one company buys another for more than the fair market value of its net assets.
Here are some things to know about goodwill:
*How it's created*
Goodwill is created when a company pays more than the fair market value of another company's net assets. The buyer believes the acquired company has valuable intangible assets that will provide future economic benefits.
*How it's treated*
Goodwill is treated differently from other assets because it doesn't have a discernible useful life. Instead, it's periodically tested for impairment. If goodwill is impaired, its value must be written off, which reduces the company's earnings.
*How it's valued*
Goodwill can be valued using the average profits method, the super profits method, or the capitalization method.
*How it's important*
Goodwill is important because it reflects the non-physical attributes that add value to a business. It can enhance business value, customer loyalty, and brand reputation.
*How it's different from negative goodwill*
Negative goodwill is when a company acquires another company for less than fair market value. This often happens when the company being acquired is trying to liquidate assets or has gone bankrupt.
Thank you anush
What is goodwill bro????
Ya
Seems like quite expensive, what should be comparable PE should be given to these kind of companies
Achhi jankari mili,sir.per IPO Lena chahiye ya nahi,vo bataya nahi 😂
Inka stand salo se fix hai. Never apply for ipo
Jankari mili se video te toh tu khud decide karle tere risk k hisab te karna chahiye ya na. Dusre ka opinion ka k karega jad rapiye tere hai
Dont buy IPO agar company Lena hai toh atleast 6-12month post listing dheko
My dear, all investors will be cheated. I have already lost 25 lacs in earlier ipo in 2007
Kaise
@@anilkumardawar2657 which stocks..?
Which stocks..??