Goodwill calculation:

unirover

I'm currently trying to value my busines which I'm putting up for sale, but am having difficulties valuing the goodwill I've generated (hopefully!) over the course of time I've been trading. This seems to be a varied area with room for mistakes and miscalculation and I certainly don't want to overcharge prospective clients/buyers, and equally don't want to undervalue the hard graft I've put in over the course of time. Can anyone help? Clarity is key, cos my head's spinning!! Thanks...

9217niall

I cannot help you with this but hopefully somebody will be along soon to help you who is more qualified at this sort of thing.
Hope all goes well!

sexystephsmith

The goodwill is an accounting concept for the amount above the value of the assets of the business that a buyer has been willing to pay for the business.

As a starting point, you should look at you assets and find, as far as reasonably possible depending on the nature of the assets, what their market value is. This will be different to their carrying value in your accounts.

Then you should look at anything you have that is not included as an asset in your accounts, for example a customer list or other less tangible things such as the awareness of your 'brand' in the local area. The value you place on these will very much depend on the nature of your business.

Perhaps if you replied with some further details of what it is you do and what 'assets' you might hold that are not permitted to be included in your accounts.