Goodwill kya hota hai | branding | Hindi | Start-up India #Business Shorts

What Is Goodwill?
Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, goodwill is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists.

What Goodwill Tells You
The value of goodwill typically arises in an acquisition—when an acquirer purchases a target company. The amount the acquiring company pays for the target company over the target’s net assets at fair value usually accounts for the value of the target’s goodwill. If the acquiring company pays less than the target’s book value, it gains negative goodwill, meaning that it purchased the company at a bargain in a distress sale.

Goodwill is recorded as an intangible asset on the acquiring company's balance sheet under the long-term assets account. Under the generally accepted accounting principles (GAAP) and the International Financial Reporting Standards (IFRS), companies are required to evaluate the value of goodwill on their financial statements at least once a year and record any impairments.

Goodwill is considered an intangible (or non-current) asset because it is not a physical asset like buildings or equipment.

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