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What is goodwill? How do u calculate it?
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Answer Posted / akanksha saini
Goodwill 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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