Advanced
Recognition of Goodwill in Acquisition
Recording the excess price paid over the fair value of net assets when buying a business.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Identifiable Net Assets | Asset (+) | 80,000.00 | - |
| Goodwill | Asset (+) | 20,000.00 | - |
| Cash | Asset (-) | - | 100,000.00 |
💡 Accountant's Note
Goodwill represents intangible value like brand reputation and customer loyalty that isn't on the target company's books.
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