The value of many assets is little more than a collection of best guesses. For none is this more true than goodwill
What is goodwill? Ultimately it is simply the result of a sum.
When one company buys another, goodwill is the difference between the appraised value of the target’s assets, minus any assumed liabilities.
It's basically an accounting ruse to deal with a bid premium without the balance sheet becoming unbalanced.
Now companies must cast the slide rule over their goodwill each year and work out whether it’s still worth what they thought it was.
Spoiler: they usually find it is.
Ben Wright Telegraph 2021
https://www.telegraph.co.uk/business/2021/04/28/unlikely-ticking-time-bomb-corporate-balance-sheets/
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