Question

what is accounting goodwill? is it good or bad ?

Answer 1

An accounting goodwill is an intangible assets. This is the excess of the purchase consideration paid over the Net assets acquired. This is the intangible cost that the acquire demand for the reputation or goodwill of the firm.

This is recorded on the long term asset for the firm. The goodwill is the consolidated name for brand reputation, customer loyalty, superior product etc. Goodwill have an indefinite life which should be reviewed atleast annually.

Goodwill of its own is not a bad thing, it's just the premium over the price paid by the owner. The good or bad side of the goodwill depends on the benefits of the merger.

On the other hand accounting goodwill doesn't not create economic value for the firm in the future.

So, whether the goodwill is good or bad depends on the market value it creates, it synergy and amount.