A business generally comprises various assets, one of which is often goodwill. Unlike other assets such as business premises, goodwill is intangible. The intangible nature of goodwill can cause difficulties including: the identification of goodwill; whether it is capable of being transferred from one person to another; and valuations.
This article focusses on the first of these potential difficulties; establishing whether goodwill exists in a business. The fact that goodwill is not always recognised on the balance sheet of a business is unhelpful, but its absence does not necessarily mean goodwill does not exist.
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