Answer Posted / triloksharma71

Goodwill as a term was originally used to reflect the fact
that an ongoing business had some "prudent value" beyond
its assets, such as the reputation the firm enjoyed with
its clients. Likewise, a buyer may agree to "overpay"
because he sees potential synergy with his own business.
The accounting sense of goodwill followed as a possible
explanation of why a firm sells for more than the value of
its current assets.

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