Posted by Bruce Kahl on April 26, 2001
In Reply to: Goodwill hunting posted by mortimer on April 26, 2001
: What does the phrase "goodwill hunting" mean? Where does it come from. Thnx.
I know it as an accounting term.
"Goodwill" is the portion of company's value that doesn't represent tangible assets.
It is a corporation's reputation and can also include ideas, research and potential and this is where the "hunting" part comes in:
If a corp. is having a bit of a trying time it can cover up the lack of sales on its balance sheet by "hunting" and creating "goodwill".
Padding a balance sheet with goodwill just makes it more difficult for an investor to make a correct judgement.