Goodwill Calculation Calculator

About this calculator

In acquisition accounting under standards like ASC 805 (US GAAP) and IFRS 3, goodwill is the excess an acquirer pays above the fair value of the target's net identifiable assets: goodwill = purchase price − (fair value of identifiable assets − liabilities assumed).

It captures value that can't be attributed to any single identifiable asset — brand reputation, customer relationships, assembled workforce, or expected synergies — and unlike most assets it is not amortized on the balance sheet but instead tested at least annually for impairment.

M&A analysts and corporate accountants compute this figure right after closing a deal, using the purchase price and the acquired company's assets and liabilities restated to fair value in a purchase price allocation (PPA), to determine how much of the deal price lands on the balance sheet as goodwill.