2020 was a pretty wild ride for all kinds of businesses.
While we’re all glad to see it in the rearview mirror, there are some after-effects regarding valuations that you might want to consider.
Many businesses report “goodwill” on their balance sheets. Goodwill is an intangible asset on a company’s books that reflects the amount of the purchase price paid for a company’s net assets above the fair value of acquired tangible and other intangible assets in a sale transaction. Unlike some other assets, goodwill does not necessarily amortize over time, but it can be worth less than its original value. (More on that in a minute.)