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To: pat mudge who wrote (198)1/31/2001 11:03:17 AM
From: EdR  Read Replies (1) | Respond to of 475
 
Pat,

As I remember from my Acct 101 days, Goodwill is the difference between what is paid for an asset like a company and the actual book value of that asset. If Company A buys Company B for $1 mil and the actual book value(difference between assets and liabilities) of Company B is $800k then there is a $200k accounting entry made on the asset side of the balance sheet and it's called GoodWill. This has had to be amortized over a period of time in the past. I think recent acctg rules have changed that requirement... all IMHO...

Ed...



To: pat mudge who wrote (198)1/31/2001 11:07:26 AM
From: Sultan  Read Replies (1) | Respond to of 475
 
You will see goodwill on a lot of companies balance sheet where they have acquired companies.. Common place.. You will even see goodwill that run into billions. And that gets written off every quarter.. One reason a lot of tech companies keep reporting earnings excluding write offs.

When I am looking at a balance sheet, I normally take out goodwill from share holder equity to get a true sense of what assets and liabilitIes are like... FWIW..


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