Bookkeepers for small businesses in Sydney explain what is goodwill

When you run a business, goodwill is an intangible asset that represents the portion of the business value that cannot be attributed by other business assets. Our bookkeepers for small businesses in Sydney will tell you how goodwill works and what it different types there are.

Here are the key factors that contribute to the creation goodwill in a business:

  • Going concern value: it indicates the existence of business assets ready for use in producing business income
  • Excess business income: meaning the existence of earnings above a fair return on all other assets
  • Expectation of future economic benefits

There are two different types of goodwill in a business:

  • Intuitional goodwill: is associated with the businesses positions in the market place and it’s ability to effectively serve its customers
  • Professional practice goodwill: is associated with professional practices such as doctors, lawyers etc. and ha two components, which include practitioner and practice goodwill.

If you need any help in establishing or evaluating your businesses goodwill feel free to ask our small business bookkeepers in Sydney for any help.

Our bookkeepers for small businesses in Sydney are always willing to help and give advice for your businesses accounts.