Goodwill Accounting, Explained | US News – U.S News & World Report Money
Goodwill in accounting and investing is a term used to describe intangible assets that don’t appear in hard numbers on a balance sheet.
These can include a host of things that companies tend to value but can’t quantify, including:
- A strong brand.
- A large and loyal existing customer base.
- Proprietary technology or software.
- An elite workforce that offers best-in-class leadership.
Oddly enough, despite these hard-to-value examples, there is usually a specific number for goodwill ascribed to corporate balance sheets. As one example, Alphabet Inc. (ticker: GOOG, GOOGL) – the trillion-dollar tech giant that runs search engine Google and video platform YouTube – calculated a value of about $23 billion for all its goodwill at the end of 2021.
Alphabet regularly makes acquisitions of smaller companies. And in those transactions, it often buys companies without a lot of hard assets to speak of. But they do have key staff, innovative technology or other items of value. The premium paid for…
Read Full Story: https://money.usnews.com/investing/term/goodwill
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