Goodwill also referred to as company value

Generally, the positive difference between the purchase price for a company and the fair market value of the assets and liabilities acquired with a company. – According to IAS/IFRS, in the case of a business combination, any excess of the purchase cost (historical cost) over the acquirer’s interest in the assets and liabilities acquired at the date of exchange must be recorded as goodwill. This excess must be treated as an asset and amortized over its useful life (economic life). A useful life of twenty years is normally assumed. – See goodwill.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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