How does Goodwill get created in an acquisition?

Goodwill is an intangible asset that, unlike other intangibles, remains mostly unchanged over time and is not depreciated. It only changes when a company is acquired.
Goodwill refers to valuable assets that aren’t represented on the balance sheet as financial assets. Brand identity, customer relationship, intellectual property rights, and so forth are examples.

Goodwill is calculated by subtracting a company’s book value from its equity acquisition price. It denotes the buyer’s payment in excess of the seller’s “fair market value.”

The very, very, simplest way of thinking about this is existing customers and repeat orders.

Goodwill is what is left over when you take the total value of a company and subtract the value of all of its tangible assets. So you don’t need an acquisition to calculate it, but an acquisition brings the value of goodwill into sharper focus because someone has just placed a firm fixed value on a company and the math is less slippery.