Goodwill Valuation

Roberto Moro-Visconti ()
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Roberto Moro-Visconti: Catholic University of the Sacred Heart
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Chapter Chapter 4 in Augmented Corporate Valuation, 2022, pp 109-132 from Springer

Abstract: Abstract The economic valuation of goodwill is based on an interdisciplinary approach that synergistically considers its legal, accounting, fiscal, and strategic aspects. The controversial concept of goodwill (if positive, badwill if negative) has always divided lawyers, businesspeople, and economists and is applied in M&A transactions. Digital goodwill is even more slippery, as it refers to the scalable properties of innovative intangibles, whose business models and market comparables are difficult to figure out. Any competitive advantage is intrinsically ephemeral. Goodwill is a residual intangible since it incorporates all the added value that cannot be directly allocated to any other specific immaterial asset. The customers’ portfolio is one of the most critical components of goodwill. The damage due to loss of goodwill, due to the diversion of customers, infringement of exclusivity, counterfeiting can hinder the bankability of the damaged company and is very frequent and uneasy to estimate.

Keywords: Goodwill; Badwill; Intangible asset; Valuation; IAS 36; IFRS 3; Competitive Advantage Period; Economic Value Added; Market Value Added; Customer portfolio; Extra profit; Useful life; Trademark; Monopoly; Commercial viability; Exchange value; Impairment test; Rarity; Retention rate (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/978-3-030-97117-5_4

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