Goodwill represents the premium paid above the fair value of identifiable net assets acquired in a business combination — the intangible value embedded in the business but not separately identifiable as individual assets: reputation, customer loyalty, assembled workforce, anticipated synergies. Under IFRS 3, goodwill is not amortised but subject to annual impairment testing (IAS 36). In intangible asset valuation (PPA), goodwill is the residual after allocating the acquisition price to all separately identifiable assets — its minimisation through exhaustive intangible identification is a key PPA objective.

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Example: the acquisition of a Swiss software company for CHF 25.0 million generates a PPA identifying CHF 4.5 million of developed technology, CHF 3.2 million of customer relationships and CHF 800,000 of other intangibles. Book net assets: CHF 2.1 million. Residual goodwill = CHF 25.0 - 4.5 - 3.2 - 0.8 - 2.1 = CHF 14.4 million — representing synergies and assembled value not captured by separately recognised intangibles.

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Hectelion conducts PPA engagements required for goodwill accounting under IFRS 3, maximising intangible identification to produce defensible residual goodwill conclusions.