An Empirical Basis for Allocating Enterprise and Personal Goodwill
American Society of Appraisers
Business Valuation Review™
Volume 29, Issue 1
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.
Copyright American Society of Appraisers
The information contained in this product is based on content obtained by ASA from sources considered to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. BVR and ASA accept no liability for the use of such information which is provided "AS IS" and with no warranties, express or implied.