When might goodwill increase?
I'm a little confused by M&I's answer to this question, which is: 1. during an acquisition because goodwill is a "plug" for the purchase price, or 2. when a company acquires another company but pays more than what its assets are worth
My confusion: Aren't these two answers essentially the same thing? If you're acquiring a company and your goodwill goes up, then isn't it a given that you're paying more than what the assets are worth? Maybe I'm missing something..
Thanks in advance
Goodwill is the extra value accumulated over the years. What you pay = exact worth + goodwill;
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