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To: bonnuss_in_austin who wrote (12625)	4/12/2001 11:07:08 PM
From: mishedlo	Respond to of 13572

Goodwill is an investment etc that is not written off now but over time. Hope I am explaing this correctly. Company xyz buys another company zzz for $1B. Well they carry the value of that company on the books as goodwill valued at $1B (depreciating slowly) even if zzz is worthless! Take a look at JDSU. Their "book value" includes a ton of goodwill. This is typical of garbage book values you see and how and why companies trade below book value in this market. Typically it is because of totally wothless "goodwill". Hope this answer is close enough as I have been acqused of spouting off without facts lately. Here is a definition I found on the FOOL "Goodwill is a premium paid (purchase price in excess of appraised value or book value) for an Acquired Company. Basically, goodwill represents the synergistic effect of assets on future earnings. As a going concern an acquired company is worth more that the value of the individual components. Accounting theory seeks to match the premium paid for the acquired company against the future earnings." M