Acquisition goodwill is an intangible asset that arises when a company acquires another business for a price that exceeds the fair value of its identifiable net assets. This excess payment often reflects the value of the target company's reputation, customer relationships, employee expertise, or other unique advantages that are not easily quantifiable. Acquisition goodwill plays a crucial role in purchase price allocation, helping to clarify how much of the total acquisition cost is attributable to these intangible elements.
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