WHAT IS GOODWILL?

WHAT IS GOODWILL?

1. Goodwill is called intangible value, derived from factors such as customers, efficiency, organization, credit, prestige, experience, the location of the company or the establishment in front of third parties, the good location, the quality of the merchandise or service, good relations with workers, their job stability, and the confidence that is achieved in the financial sector, due to a good managerial performance

   • The processes of merger and acquisition of companies they cover the negotiation of all their assets, where the intangible assets are the majority.
     • Only acquired intangibles are valued; the generated by the organization are not taken into account:
     • Goodwill in many cases is not identify
     • The intangible is undervalued
     • The increase in the value of the assets is not recognized intangible

2. Proctor and Gamble acquired Gillette for 63 billion dollars in 2005

   • they valued the intangible assets in 55 billion dollars, of which 35 billion corresponded to goodwill, representing 63.6% of the intangible value. So there was an overestimation of intangible assets of goodwill and an underestimation of the identified intangible asset.

3. In 2006, Google acquired YouTube for $ 1.2 billion, which was in the headlines of the stock market of brands

   • Of the total acquisition, only 200 million were attributed to identified intangible assets, and 83.4% to goodwill. It is known that the success of YouTube is due to the ability of the brand to attract subscribers, so the valuation made for the brand is extremely low

4. Walt Disney paid $ 7.5 billion for digital animation studio Pixar

   • Intangible brand assets and commercial names were valued at only 200 million, and goodwill at 5600 million. This is another example of overestimation of goodwill and underestimation of the identified intangible asset.

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