What's Goodwill Got to Do With It?
The other day an attorney friend said in his best Scrooge-like voice, “I don’t like goodwill.” Because we were discussing business sales, I knew he wasn’t referring to the happy, peaceful, holiday goodwill. He meant business goodwill except he called it “blue-sky”. Contrary to popular belief, the word blue-sky is not synonymous with goodwill. Goodwill has more than one meaning especially at this time of year, but blue-sky isn’t one of them. My attorney friend was confusing something of no value (blue-sky) with a sale-able asset (goodwill). While some owners do have blue-sky dreams, the buyer purchases goodwill and tangible assets when a business is transferred in an asset sale. According to Merriam-Webster’s dictionary, Goodwill is: 1) a kindly feeling of approval and support; benevolent interest or concern; 2) the favor or advantage that a business has acquired especia...
