In accounting, “goodwill” is classified on a balance sheet as an intangible asset. This asset arises when an existing business is acquired and the market value of the inventory, plant and equipoment and other assets is less than the value paid for the business. So, “goodwill” on the balance sheet represents assets that are not separately identifiable. Per a nice description in Wikipedia – technically, it is not “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”. Many readers might be familiar with the concept of asset-strippers or corporate-raiders. These are typically investors that buy companies for their assets and not for the goodwill. They’ll then systematically liquid parts or assets within the company they acquire because the sum of the market value of the assets is greater than the balance sheet value. You could argue that there is negative goodwill in such organizations because the value of the business is greater when liquidated than running it as a unified going concern. 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. Per accounting standards, goodwill is evaluated periodically for any possible impairment in value.
Pretectum believes that the best way to manage your customer master data assets is with a centralized master data management platform like the Pretectum cloud-based C-MDM.
