Acquisition Accounting Articles

Goodwill and Intangible Assets on a Balance Sheet, Explained

Goodwill and intangible assets are nonphysical asset balances, but they arise differently. Goodwill is the residual recognized when a business is acquired after measuring its identifiable assets and liabilities. Other intangibles can be identified individually: a patent, licence, software asset or acquired customer relationship. Their balance-sheet amounts follow accounting recognition and measurement rules, rather than a company’s estimate of everything its reputation is worth.