Goodwill

An intangible, salable asset arising from the reputation of a business; the expectation of continued public patronage; including other intangible assets like trade name and going-concern value. When a business is sold, the sales price often reflects its goodwill value. Goodwill is not a depreciable asset, although it is a capital asset. Thus, a seller prefers to place a high value on the goodwill (and obtain a capital gain), while a buyer prefers a lower value (because goodwill cannot be depreciated). If goodwill is considered in a market value appraisal, the appraiser should specifically identify it.