Overview
Goodwill represents value beyond identifiable net assets, such as reputation, workforce and synergies. It must be valued in acquisitions and tested for impairment under accounting standards.
Key points
- Common approaches include excess earnings and income methods
- Needed for acquisitions, mergers and restructuring
- Impairment testing is required periodically
- Supports negotiation of purchase price
- Documentation for auditors and regulators
Typical documents required
- Financial statements and projections
- Transaction details
- Details of cash-generating units
- Previous valuation reports, if any
How we work
Scope and purpose
Analysis and modelling
Report drafting
Support for audit and regulatory queries
Frequently asked questions
How is goodwill different from other intangible assets?
Goodwill is not separately identifiable. It is the residual value after identifiable assets are measured.
How often is impairment tested?
At least annually for goodwill, or earlier if there are indicators of impairment.
This page gives general information and is not legal or tax advice. Requirements change, so confirm current rules for your situation with us before acting.