By Leanna Kelly When you feel good about something, you’re usually willing to pay more for it. It’s the same concept when a company considers acquiring another. As a result, acquiring companies are often willing to pay a premium on the transaction. That extra is known as goodwill in accounting: the excess amount paid over the net worth of the acquired company.
Goodwill tends to represent the intangible, long-term assets from the acquisition of one company by another. The company’s brand-name best-selling products or its lengthy library of intellectual property. Whether that goodwill will actually amount to the premium paid for it is what …read more
