<Ul> <Li> Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business . Goodwill represents assets that are not separately identifiable . Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold , transferred , licensed , rented , or exchanged , either individually or together with a related contract , identifiable asset , or liability regardless of whether the entity intends to do so . Goodwill also does not include contractual or other legal rights regardless of whether those are transferable or separable from the entity or other rights and obligations . Examples of identifiable assets that are not goodwill include a company 's brand name , customer relationships , artistic intangible assets , and any patents or proprietary technology . The goodwill amounts to the excess of the `` purchase consideration '' ( the money paid to purchase the asset or business ) over the total value of the assets and liabilities . It is classified as an intangible asset on the balance sheet , since it can neither be seen nor touched . Under US GAAP and IFRS , goodwill is never amortized . Instead , management is responsible for valuing goodwill every year and to determine if an impairment is required . If the fair market value goes below historical cost ( what goodwill was purchased for ) , an impairment must be recorded to bring it down to its fair market value . However , an increase in the fair market value would not be accounted for in the financial statements . Private companies in the United States , however , may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB . </Li> </Ul>
<Ul> <Li> Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business . Goodwill represents assets that are not separately identifiable . Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold , transferred , licensed , rented , or exchanged , either individually or together with a related contract , identifiable asset , or liability regardless of whether the entity intends to do so . Goodwill also does not include contractual or other legal rights regardless of whether those are transferable or separable from the entity or other rights and obligations . Examples of identifiable assets that are not goodwill include a company 's brand name , customer relationships , artistic intangible assets , and any patents or proprietary technology . The goodwill amounts to the excess of the `` purchase consideration '' ( the money paid to purchase the asset or business ) over the total value of the assets and liabilities . It is classified as an intangible asset on the balance sheet , since it can neither be seen nor touched . Under US GAAP and IFRS , goodwill is never amortized . Instead , management is responsible for valuing goodwill every year and to determine if an impairment is required . If the fair market value goes below historical cost ( what goodwill was purchased for ) , an impairment must be recorded to bring it down to its fair market value . However , an increase in the fair market value would not be accounted for in the financial statements . Private companies in the United States , however , may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB . </Li> </Ul>
where do you put goodwill on a balance sheet
where do you put goodwill on a balance sheet
It is classified as an intangible asset on the balance sheet
It is classified as an intangible asset on the balance sheet