The purpose of this research is to provide a logical methodology for allocating the total goodwill of a professional practice between the element of personal goodwill attributable to the practitioner and the element of enterprise goodwill attributable to the professional practice. The methodology presented in this research includes four basic steps: (a) the identification of individual factors within a professional practice that are attributes of goodwill; (b) the objective determination of the comparative importance of each attribute in relation to other personal and enterprise goodwill attributes; (c) the evaluation and scoring of the subject enterprise in relation to each personal and enterprise goodwill attribute; and (d) a weighted average conclusion for the percentage of allocable goodwill attributable to elements of personal goodwill and the percentage allocable to enterprise goodwill. For the sake of identification, the model is referred to as the Goodwill Assessment System (“GAS”).
Copyright American Society of Appraisers
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