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Goodwill Formula

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Goodwill refers to the intangible value of a business beyond its tangible assets. Check FAQs

G = CP + FVNI + FVEI - FVNR

G - Goodwill?CP - Consideration Paid?FVNI - Fair Value of Non Controlling Interest?FVEI - Fair Value of Equity Previous Interest?FVNR - Fair Value of Net Assets Recognized?

Goodwill Example

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With units

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Here is how the Goodwill equation looks like with Values.

Here is how the Goodwill equation looks like with Units.

Here is how the Goodwill equation looks like.

2500 = 1300 + 1700 + 2300 - 2800

2500 = 1300 + 1700 + 2300 - 2800

2500 = 1300 + 1700 + 2300 - 2800

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Goodwill Solution

Follow our step by step solution on how to calculate Goodwill?

FIRST Step Consider the formula

G = CP + FVNI + FVEI - FVNR

Next Step Substitute values of Variables

∴

G = 1300 + 1700 + 2300 - 2800

Next Step Prepare to Evaluate

∴

G = 1300 + 1700 + 2300 - 2800

LAST Step Evaluate

∴

G = 2500

Goodwill Formula Elements

Variables

Goodwill

Goodwill refers to the intangible value of a business beyond its tangible assets.

Symbol: G

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Goodwill

Consideration Paid

Consideration Paid refers to the total value transferred by an acquiring company to the selling company in a business acquisition or merger.

Symbol: CP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Consideration Paid

Fair Value of Non Controlling Interest

Fair Value of Non Controlling Interest refers to the proportionate value of a subsidiary's equity that is not owned by the parent company.

Symbol: FVNI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Fair Value of Non Controlling Interest

Fair Value of Equity Previous Interest

Fair Value of Equity Previous Interest is referred to as the fair value of the equity interest held by the controlling entity before an acquisition or merger.

Symbol: FVEI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Fair Value of Equity Previous Interest

Fair Value of Net Assets Recognized

Fair Value of Net Assets Recognized represents the fair value of the identifiable assets acquired and liabilities assumed in a business combination.

Symbol: FVNR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Fair Value of Net Assets Recognized

Other formulas in Mergers and Acquisitions category

Go Accretion Amount

AA = ((PB) \cdot (\frac{YTM}{APPY})) - CI

Go Takeover Premium

TPM = PT - VT

Go Gain of Acquirer

GAQ = S - (PT - VT)

Go Post Merger Value of Merged Company

PMV = PVA + VT + S - C

How to Evaluate Goodwill?

Goodwill evaluator uses Goodwill = Consideration Paid+Fair Value of Non Controlling Interest+Fair Value of Equity Previous Interest-Fair Value of Net Assets Recognized to evaluate the Goodwill, Goodwill on the Transaction represents the reputation, brand recognition, customer loyalty, and other intangible assets that contribute to a company's value. Goodwill is denoted by G symbol.

How to evaluate Goodwill using this online evaluator? To use this online evaluator for Goodwill, enter Consideration Paid (CP), Fair Value of Non Controlling Interest (FVNI), Fair Value of Equity Previous Interest (FVEI) & Fair Value of Net Assets Recognized (FVNR) and hit the calculate button.

FAQs on Goodwill

What is the formula to find Goodwill?

The formula of Goodwill is expressed as Goodwill = Consideration Paid+Fair Value of Non Controlling Interest+Fair Value of Equity Previous Interest-Fair Value of Net Assets Recognized. Here is an example- 2500 = 1300+1700+2300-2800.

How to calculate Goodwill?

With Consideration Paid (CP), Fair Value of Non Controlling Interest (FVNI), Fair Value of Equity Previous Interest (FVEI) & Fair Value of Net Assets Recognized (FVNR) we can find Goodwill using the formula - Goodwill = Consideration Paid+Fair Value of Non Controlling Interest+Fair Value of Equity Previous Interest-Fair Value of Net Assets Recognized.

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Goodwill Formula

Goodwill Example

Goodwill Solution

Goodwill Formula Elements

Other formulas in Mergers and Acquisitions category

How to Evaluate Goodwill?

FAQs on Goodwill

Variable Name