What is goodwill in SAP SRD-FIN-ACC - FIN-Financial Accounting?

SAP Term: goodwill

• Component: SRD-FIN-ACC

• Component Name: FIN-Financial Accounting

• Description: The value of the company's name and reputation. Goodwill equals the purchase price less the book value of the aquired company's net assets less the amount by which the aquired company's depreciable assets are written up to their fair market value.

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• Key Concepts: 
  Goodwill is an intangible asset that is recorded on the balance sheet of a company when one company acquires another. It is the difference between the purchase price of the acquired company and the fair market value of its net assets. Goodwill is not amortized, but instead is tested for impairment annually. 
  
  How to use it: 
  In SAP, goodwill is recorded in the Asset Accounting (FI-AA) module. When a company acquires another, the purchase price is recorded as an asset in FI-AA and the fair market value of the net assets is recorded as a liability. The difference between these two amounts is then recorded as goodwill. 
  
  Tips & Tricks: 
  When recording goodwill in SAP, it is important to ensure that all relevant information about the acquisition is accurately captured. This includes the purchase price, fair market value of net assets, and any other relevant details about the transaction. 
  
  Related Information: 
  Goodwill can also be recorded in other modules such as Controlling (CO) and Financial Accounting (FI). For more information on recording goodwill in SAP, please refer to SAP Help documentation or contact your local SAP support team.