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An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

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Goodwill in accounting is the value attributed to non-tangible elements like a company's brand, customer relationships, employee relations, and proprietary assets. It arises when the purchase price of a company exceeds the sum of the fair values of all identifiable assets minus liabilities. Recorded as a non-current asset, goodwill is an indication of the premium paid for intangible benefits and potential future earnings. It is not amortized but is subject to annual impairment tests to ensure the recorded value is not greater than the realizable worth.
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