Financial term of the day, Tuesday 2nd of September 2014:

Goodwill impairment

An asset reported mainly as goodwill on the balance sheet may be worth much less than the value reported. In this case the good will is impaired and the company will likely have to take a write-down on this asset. This often happens when intellectual property such as software is acquired and a premium price is paid for it. Subsequently, if the software is not commercialized, the goodwill associated with it must be reduced - often to zero.

Similar financial terms

Goodwill
The value of a business to a purchaser over and above its net asset value. It reflects the value of intangible assets like:


Goodwill is normally given a value in a company's balance sheet, but is depreciated over a period of time.

Goodwill impairment
An asset reported mainly as goodwill on the balance sheet may be worth much less than the value reported. In this case the good will is impaired and the company will likely have to take a write-down on this asset. This often happens when intellectual property such as software is acquired and a premium price is paid for it. Subsequently, if the software is not commercialized, the goodwill associated with it must be reduced - often to zero.

Did you know?

CNY

Yuan Renminbi from China.

The renminbi is the official currency of the People's Republic of China. The People's Republic of China (PRC) comprises most of the cultural, historic, and geographic area known as China.

The renminbi was first issued shortly before the takeover of the mainland by the Communists in 1949. One of the first tasks of the new communist government was to end ...


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