Business goodwill (or commercial goodwill) is the intangible value of a business attributable to its established customer relationships, brand reputation, trained workforce, favourable contracts and market positioning — as opposed to the identifiable individual assets on the balance sheet. It arises in PPA as the residual value after allocating the acquisition price to all identifiable assets and liabilities at fair value. Under IFRS 3, goodwill is not amortised but tested annually for impairment. It should be distinguished from identifiable intangible assets such as brands, customer lists and know-how, which are recognised separately.

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Example: the acquisition of a Swiss wealth management boutique for CHF 22.0 million results in a PPA identifying CHF 6.5 million of client relationship intangibles (valued using the multi-period excess earnings method) and CHF 1.2 million of other identifiable assets. Net of identified liabilities, goodwill amounts to CHF 9.8 million — representing the premium paid for the firm's reputation and staff quality, not separately identifiable.

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Hectelion conducts PPA engagements to allocate acquisition prices between goodwill and identifiable intangibles in compliance with IFRS 3 and Swiss GAAP.