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     Kubang Celebrity Bewarse Username: Kubang Post Number: 29385 Registered: 09-2011 Posted From: 161.141.1.1 Rating: N/A |
When you buy a business, normally you end up paying more than what it is worth for (in most cases). That's the premium you are willing to pay in the hope of making more than that in the lifecycle of that business. suppose if you are buying a shop that is worth only 1 million but you are willing to pay 1.25 million because of location or whatever, then 250k becomes goodwill on the books. that also means if the merger or acquisition doesn't work in the acquirer's favour they need to write down the goodwill at some point. more goodwill on the books is never good. Ignorance is bliss |