Goodwill
AccountingDefinition
The premium paid in an acquisition above the fair value of identifiable net assets acquired. Sits as an intangible asset on the balance sheet. Represents brand, customer relationships, synergies, and other unquantifiable value.
Tested for impairment annually. Big goodwill impairments are typically a confession that an old M&A deal was overpaid (e.g., GE Power 2018, Bayer-Monsanto). Total goodwill on S&P 500 balance sheets exceeds $4T.
Tested for impairment annually. Big goodwill impairments are typically a confession that an old M&A deal was overpaid (e.g., GE Power 2018, Bayer-Monsanto). Total goodwill on S&P 500 balance sheets exceeds $4T.