Goodwill (original) (raw)

For the article about the charity: see Goodwill Industries

Goodwill is an accounting concept that describes the value of a business entity not directly attributable to its physical assets and liabilities.

Goodwill is often included on a balance sheet as an asset, but its valuation may be suspect if supporting evidence like an independent survey is missing. Goodwill is forced onto the balance sheet when a company is purchased for more than the sum of the value of the assets of the company. The difference between the purchase price and the sum of the assets is by definition the value of the "goodwill" of the company.

For example:

• A quality provider of goods or services builds up a good reputation (UPS, L.L. Bean).
• A brand name controlled by the business becomes recognizable by a large part of the population (Tide, Cheerios).

Goodwill also means simply to have a will to do good in a community, or, to simply try to help people who are in need (for example, serving at a soup kithen or at a homeless shelter).

Other examples:

• The will to do good.
• The effort to help out or support others.
• Willing to help out in an effort to make things better.