Goodwill is an intangible asset. It represents the excess of the purchase price of a business over the fair value of its identifiable assets and liabilities. Goodwill arises when a business is acquired for a price that is higher than the fair value of its net assets. it is not a physical asset, and it cannot be touched or seen, but it represents the value of the business's reputation, brand, customer relationships, and other intangible factors that contribute to its profitability.