By Andrew Soshnick, AAML

Each jurisdiction defines and values personal and enterprise goodwill differently. The analysis of goodwill involves complex accounting and forensic reviews that use different approaches, methods and procedures. How to undertake this analysis requires the acquisition of significant information and thoughtfulness in electing how to segregate and value goodwill. Theses points of emphasis permeated a fascinating session at the AAML Annual Meeting, where the presenters explained the process of information gathering, explained alternative methods of data analysis and offered a compendium on how goodwill is assessed in each state.

The BVR Goodwill Hunting Chart included in the presenters’ materials provides a useful resource for understanding goodwill throughout the United States.

Jim Godbout, CBIZ Forensic Consulting Group, LLC; James M. Quigley, Beermann LLP; and Renee Ross, Ross Family Law, PC,  discussed these concepts and delved deeply in the myriad ways to try to measure and segregate personal and enterprise goodwill.

The panel left us with six key takeaways:

1. Carefully identify all tangible and intangible assets.
2. Assess transferability of relationships and skills.
3. Document assumptions and methodologies.
4. Be aware of double counting.
5. Decide whether to use court-appointed, joint or separate experts.
6. Collaborate with experts to learn how to challenge opposing experts.

This session is a reminder that the fascinating world of goodwill can be made more understandable when complete financial information is gathered and assessed conjointly with a valuation professional who understands and can explain this concept in a simplified fashion.