An Empirical Basis for Allocating Enterprise and Personal Goodwill

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American Society of Appraisers Business Valuation Review™
Spring 2010 Volume 29, Issue 1 pp. 4-11
Tyler J. Bowles, PhD, CPA, CVA
Ryan Bosworth, PhD


Van Amburgh's methodology for allocating personal and enterprise goodwill is flawed. We present a standard empirical approach that can be applied to the problem of allocating goodwill. Based on survey data of professional accounting firms, we apply regression analysis and estimate the percentage of total goodwill that is personal goodwill. These results suggest that personal goodwill for relatively small professional accounting practices ranges from approximately 45% to 88% of total goodwill. The same methodology and data are also applied to the problem of determining an individual owner's share of total personal goodwill.
An Empirical Basis for Allocating Enterprise and Personal Goodwill
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