As a legal expert with a focus on corporate and commercial law, I can provide a detailed explanation of the term "goodwill" in legal terms.

In legal terms, goodwill refers to the value of a business beyond its tangible assets. It is often considered intangible because it is not a physical asset that can be touched or seen. Goodwill encompasses the reputation, customer base, brand recognition, employee skills, cultural value, and patents that contribute to the ongoing success of a business. When a company is sold, the price may include both the value of its physical assets and an additional amount for goodwill.

Goodwill is particularly important in mergers and acquisitions because it can significantly affect the purchase price. It is often calculated as the difference between the purchase price and the fair market value of the net identifiable assets. For accounting purposes, goodwill is typically amortized over a period of time, which means it is gradually written off as an expense.

In summary, goodwill is a crucial concept in legal and financial transactions involving businesses, representing the intangible assets that give a company a competitive edge in the market.

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The good reputation or brand identification enjoyed by a commercial entity. In bankruptcy and other areas of law, goodwill is considered an intangible asset. Good will is generally calculated as the difference between the purchase price of a company and the sum of its fair market value.read more >>