The Myth:
If the balance sheet shows goodwill, the company must be worth more.

The Reality:
Goodwill on the balance sheet is often a plug from prior transactions — not an independently verified or updated measure of value. It doesn’t guarantee current goodwill exists or that it’s monetizable.

Why It Matters:
Relying on outdated or accounting-based goodwill rather than current market realities can lead to major mispricing.

Practical Tip:
Focus on earning power, cash flow, and buyer perception when valuing goodwill — not old accounting entries.