We are struggling with the presence of goodwill, i.e. we know that profitable practices all have goodwill - but it is not shown or claimed on the tax return balance sheet

The only time that goodwill will actually show up on a balance sheet is if the current owner purchased the business (as opposed to started from scratch) AND they acquired it as an asset purchase(as opposed to a stock purchase).

If the current owner started the business from scratch OR acquired it via stock/equity purchase, there will NEVER be any goodwill on the balance sheet. If the owner acquired the business as an asset purchase, both the buyer and seller would have agreed to an allocation of purchase price across seven different IRS asset categories (which include goodwill) via IRS Form 8594(Asset Acquisition Statement under IRS Code 1060).

This does not mean that there is no goodwill, but it simply will not be reflected on the balance sheet if the business was started from scratch or purchased via stock sale.

The asset sale estimate of value in our report will include inventory, fixed assets and all intangibles including goodwill (catchall term for all intangibles including trade name, client list, website, phone numbers, etc).

The equity value estimate will reflect all of the asset sale accounts (inv., fixed assets/equipment, leasehold improvements, etc) PLUS any value associated with liquid financial assets (cash, A/R, prep aids, deposits, etc.) LESS any liabilities (short term and long term).

Also - this means that you do not enter a value for goodwill on our balance sheet UNLESS it is already actually on the seller's balance sheet (which would only be the case if the current owner acquired the practice through an asset purchase as described in prior emails).