The National Directory of Certified Public Accountants

Ask A CPA - Buying & Selling a Business

When I Buy A Business , How Is Goodwill Determined ?

Goodwill is the difference between the selling price and the estimated assigned values assigned to all the assets not including the goodwill. The seller's asking price will be broken down into its various components such as equipment, inventory, furniture, accounts receivable, miscellaneous assets, assumed liabilities and the difference will equal the goodwill.

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