# Goodwill

> The amount by which the price paid for an acquisition, together with any non-controlling interest and any previously held stake, exceeds the fair value of the identifiable net assets acquired.

Source: https://finconsol.com/blog/glossary/goodwill/ (updated 28 October 2026)

## Why does it matter in a group?

Goodwill appears in the group accounts when the price paid for a company, with any [non-controlling interest](/blog/glossary/non-controlling-interest/) and earlier stake, is more than the fair value of its identifiable net assets. It is worked out once, on the [acquisition date](/blog/glossary/acquisition-date/), and then tested for impairment each year. It is not amortised under IFRS.[1](#src-1) For a foreign subsidiary, goodwill is held in the subsidiary's currency and translated at the [closing rate](/blog/glossary/closing-rate/) each month.

## A small example

Zenvara pays GBP 8,000,000 for 80 percent of a company whose identifiable net assets have a fair value of GBP 8,500,000. The non-controlling interest, at its share of net assets, is 20 percent of 8,500,000, which is 1,700,000. Goodwill is 8,000,000 plus 1,700,000 less 8,500,000, which is GBP 1,200,000.

## Sources

## Sources

1. IFRS 3 [Business Combinations](https://www.ifrs.org/issued-standards/list-of-standards/ifrs-3-business-combinations/), paragraphs 19 and 32.
2. IAS 21 [The Effects of Changes in Foreign Exchange Rates](https://www.ifrs.org/issued-standards/list-of-standards/ias-21-the-effects-of-changes-in-foreign-exchange-rates/), paragraph 47.