Goodwill is a category of assets that occurs when a business is acquired.
When you do an acquisition, you put all the assets that you bought on your balance sheet as well as the liabilities.“Typically, you paid more than that—which is a good thing, because most of the value of companies comes from these intangible assets, like their customer relationships, their employees, their intellectual property. It's not stuff that you can tangibly apply generally. So most smaller companies call that all goodwill.