What is "goodwill"

n. 1 A favorably disposed attitude toward someone or something. 2 (context accounting English) The value of a business entity not directly attributable to its tangible assets and liabilities. This value derives from factors such as consumer loyalty to the brand. 3 (context business English) A concept used to refer to the ability of an individual or business to exert influence within a community, club, market or another type of group, without having to resort to the use of an asset (such as money or property), either directly or by the creation of a lien.

1. n. (accounting) an intangible asset valued according to the advantage or reputation a business has acquired (over and above its tangible assets) [syn: good will]

2. the friendly hope that something will succeed [syn: good will]

3. a disposition to kindness and compassion; benign good will; "the victor's grace in treating the vanquished" [syn: grace, good will]

Goodwill or Good Will may refer to:

• Goodwill (accounting), the value of a business entity not directly attributable to its assets and liabilities
• Goodwill Games, a former international sports competition (1986–2000)
• Goodwill Industries, a non-profit organization
• Goodwill tour, a tour by someone or something famous to a series of places
• The Goodwill, a post-hardcore band from Long Island, New York formed in 2001

• , a United States Navy patrol boat in commission from 1917 or 1918 until the end of 1918

Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business. Goodwill represents assets that are not separately identifiable. Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability regardless of whether the entity intends to do so. Goodwill also does not include contractual or other legal rights regardless of whether those are transferable or separable from the entity or other rights and obligations. Examples of identifiable assets that are not goodwill include a company’s brand name, customer relationships, artistic intangible assets, and any patents or proprietary technology. The goodwill amounts to the excess of the "purchase consideration" (the money paid to purchase the asset or business) over the total value of the assets and liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched. Under US GAAP and IFRS, goodwill is never amortized. Instead, management is responsible for valuing goodwill every year and to determine if an impairment is required. If the fair market value goes below historical cost (what goodwill was purchased for), an impairment must be recorded to bring it down to its fair market value. However, an increase in the fair market value would not be accounted for in the financial statements. Private companies in the United States, however, may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB.