Goodwill represents brand, customer relationships and expected synergies. It isn’t amortized under IFRS or U.S. GAAP for public companies but is tested yearly for impairment. Negative goodwill (a bargain purchase) is recognised as a gain.
How to use the Goodwill Calculator
- Purchase price
- Fair value of identifiable assets
- Fair value of liabilities
- Non-controlling interest
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the purchase price, the fair value of identifiable assets and liabilities, and any non-controlling interest.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Purchase price | Amount in your currency |
| Fair value of identifiable assets | Amount in your currency |
| Fair value of liabilities | Amount in your currency |
| Non-controlling interest | Amount in your currency |
What each result means
- Fair value of net assets = [Fair value of identifiable assets] – [Fair value of liabilities]
- Goodwill = [Purchase price] + [Non-controlling interest] – [Fair value of net assets]
- Goodwill as a share of the price = [Goodwill]÷[Purchase price]×100
Example values
How the main result changes when Purchase price changes and everything else stays at the example values above:
| Purchase price | Goodwill |
|---|---|
| 2,500,000 | -1,000,000 |
| 3,750,000 | 250,000 |
| 5,000,000 | 1,500,000 |
| 6,250,000 | 2,750,000 |
| 7,500,000 | 4,000,000 |
| 10,000,000 | 6,500,000 |
Formula
Fair value of net assets = fair value of assets − fair value of liabilitiesGoodwill = purchase price + non-controlling interest − fair value of net assetsWorked example
Inputs — Purchase price: $5,000,000; Fair value of identifiable assets: $6,000,000; Fair value of liabilities: $2,500,000; Non-controlling interest: $0.
Results — Fair value of net assets = $3,500,000.00; Goodwill = $1,500,000.00; Goodwill as a share of the price = 30 %.
Frequently asked questions
What is goodwill?
The premium paid over the fair value of a company's identifiable net assets.
Is goodwill amortized?
Not under IFRS or U.S. GAAP for public companies – it's tested for impairment.
What is negative goodwill?
A bargain purchase, recorded as a gain.
What formula does the Goodwill Calculator use?
Fair value of net assets = fair value of assets − fair value of liabilities.