Goodwill Calculator
Subtract the fair value of net assets from the purchase price of an acquisition to find goodwill.
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Enter the purchase price and net asset value to see goodwill.
Worked example
With these example inputs:
- Purchase price$5,000,000
- Fair value of net assets$3,500,000
Goodwill: $1,500,000
- As a share of the total30.0%
- If the first figure were 10% higher$2,000,000
Frequently asked questions
How is goodwill calculated?
Subtract the fair value of the acquired net assets from the price paid. Paying $5,000,000 for a business with $3,500,000 of net assets creates $1,500,000 of goodwill.
What does goodwill represent?
It captures the premium over identifiable net assets, things like brand, customer relationships and reputation. It sits on the balance sheet and is tested for impairment.