Sometimes companies purchase businesses for more than what they are actually worth. The difference between a business' actual worth and what someone pays for that business is referred to as goodwill.

When you feel good about something, you’re usually willing to pay more for it. It’s the same concept when a company considers acquiring another. As a result, acquiring companies are often willing to ...

Though it sounds bad, "negative goodwill" is actually a good thing for a business owner, because it means your company has bought another business for less than that company's fair market value. In ...

Ramanna, Karthik. "The Implications of Unverifiable Fair-value Accounting: Evidence from the Political Economy of Goodwill Accounting." Journal of Accounting & Economics 45, nos. 2-3 (August 2008): ...

It wasn't supposed to happen, but gains from new accounting rules seem to have helped some companies, at least temporarily, on the stock market. Analysts and others in the industry expected the rules, ...