Negative goodwill in accounting: a bargain-purchase outcome where the acquirer pays less than the fair value of identifiable net assets.
Negative goodwill is the accounting outcome when an acquirer pays less than the fair value of the target’s identifiable net assets.
In modern accounting language, this usually points to a bargain purchase rather than a normal acquisition premium.
The most common context is a distressed or forced sale where the seller accepts a price below the fair value of the underlying net assets.
Negative goodwill is the reverse: the purchase price comes in below identifiable net assets.That is why it is typically associated with bargain-purchase accounting rather than an asset carried like ordinary goodwill.