Janet,feeling the reputation of a business is very strong,pays $2.5 million for the business even though the assets were valued at $2 million.What is the excess amount over the value of the assets called?

Question

Quizplus · Accepted Answer

The excess amount over the value of the assets is known as goodwill. Goodwill represents the reputation, customer base, and other intangible assets that contribute to the company's value beyond just its physical assets. It is common for a business to be sold for more than its asset value because of the value of its goodwill.

Janet,feeling the Reputation of a Business Is Very Strong,pays $2