Financial Statements
Goodwill
Definition
What is Goodwill?
An acquisitionThe purchase of control or ownership of a company or business. asset representing the excess purchase price over the fair valueAn estimate of an asset's appropriate value under specified assumptions or accounting standards. of identifiable net assets.
Example in practice
How This Looks in Practice
A buyer pays above book valueThe accounting value of shareholders' equity. for expected synergies and records goodwill.
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Related Terms
Financial Statements
Revenue
Income generated from selling goods or services before expenses are deducted.
Financial StatementsSales Growth
The percentage increase or decrease in revenue over a period.
Financial StatementsCost of Goods Sold
Direct costs attributable to goods or services sold during a period.
Financial RatiosGross Margin
Gross profit expressed as a percentage of revenue.