Goodwill

In economics, goodwill is the term for the difference between the sale price or market capitalisation of a company and the company value determined for accounting purposes. Goodwill as an intangible asset is intended to describe the difference between the sum of all assets and liabilities of a balance sheet and the overall value of a company. The amount of goodwill in individual cases is defined by intangible assets, such as management quality, profit outlook, growth opportunities, customer potential and the importance of the company within the industry, etc. For example, the reputation of a company on the market, its technological potential, a solid customer base or high employee attractiveness result in high goodwill. Such intangible assets can lead to the purchase price of a company being higher than the accounting value of the company.