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.”