Goodwill is an intangible asset for both banks and credit unions, and can be most easily explained as an asset which can’t be invested or generate any revenue for the business. It is calculated by deducting the total purchase price of the assets as compared to their actual market value. Whenever a bank, or credit union pay a premium to purchase another bank or credit union, then such a premium is regarded as goodwill. Similarly, other factors that give an organization its status or brand name and do not exist in physical form are characterized as intangible goodwill assets. Physical assets are not taken into consideration in this case.

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