Goodwill

The value of a business to a purchaser over and above its net asset value. It reflects the value of intangible assets such as reputation, brand name, good customer relations, high employee morale and other factors that improve the company's business. Acquired goodwill is normally given a value in a company's balance sheet. It used to be amortised over a period of time, but changes in accounting standards mean that it now remains unaltered, subject to an annual impairment test which may lead to a writedown in the carrying value.