→ Ask us: about Valuing Goodwill

Goodwill makes up the remaining market value of a business entity not directly attributable to its assets and liabilities. Goodwill increasingly accounts for over half of the total purchase price in many acquisitions and explaining this significant value is required to comply with SFAS 141/142.  Intangible Business values the identifiable and separable intellectual property rights while explaining residual goodwill resulting from synergies and other intangible value.

Goodwill often represents the premium paid to acquire a business. However, this premium is generally only paid if the acquirer sees financial benefits from the acquisition. Intangible Business identifies these financial benefits, explaining what the premium represents. Common elements of goodwill include the intangible assets not valued under SFAS 141 and SFAS 142; the workforce in place; cost synergies such as reducing administration costs or greater purchasing power; sales synergies which occur by two portfolios combining to create a new, more powerful one; or the value added by the buyer by cross-selling services for example.

Intangible Business has evaluated goodwill for a number of complex acquisitions, clearly defining, quantifying and explaining the constituent parts of goodwill to auditor and financial regulators under US GAAP.

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