Re:Way to Stand up for us all (Score 1)

Actually, goodwill is attributed as an asset of the purchasing company, and not the purchased company. The purchased company in turn does not register any goodwill on its balance sheet unless it purchases a company for a sum higher than the value of its net assets. Note also that net assets can include more than just tangible assets - it can include intangibles, such as brand, contracts, etc. Goodwill was traditionally depreciated (amortised is the correct vernacular) over a number of years, however, the fashion now is for an "impairment review" to be undertaken once every accounting period, and the value of the book goodwill written down only if there is evidence that the goodwill has been reduced in value. This is chiefly because amortisation (unfairly, perhaps) tended to dramatically wipe out firm's book profitability shortly after large purchases.