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Valuation of Goodwill for an Engineering Firm

Author

Listed:
  • Bhushan Lohar

    (Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA)

  • John Wade

    (Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA
    Gulf States Engineering, Inc., Gulfport, MS 39501, USA)

  • Sean Walker

    (Department of Systems Engineering, University of South Alabama, Mobile, AL 36688, USA)

Abstract

The concept of valuing personal and enterprise goodwill is a study in the art of quantifying subjective values. Sellers strive to maximize goodwill, while buyers strive to minimize goodwill. No persons are denying the existence of goodwill; rather, the debate is centered around the value of that goodwill. This paper seeks to define a holistic approach to fairly quantifying the value of goodwill for an engineering firm. The Graph Model for Conflict Resolution (GMCR), a decision tool grounded in game theory, is used to illustrate the inherent conflict around setting an accurate goodwill value and the inherent negotiation between buyers and sellers.

Suggested Citation

  • Bhushan Lohar & John Wade & Sean Walker, 2024. "Valuation of Goodwill for an Engineering Firm," JRFM, MDPI, vol. 17(5), pages 1-13, May.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:5:p:212-:d:1397696
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    References listed on IDEAS

    as
    1. Bugeja, Martin & Loyeung, Anna, 2015. "What drives the allocation of the purchase price to goodwill?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(3), pages 245-261.
    2. D. Marc Kilgour & Keith W. Hipel & Liping Fang & Xiaoyong (John) Peng, 2001. "Coalition Analysis in Group Decision Support," Group Decision and Negotiation, Springer, vol. 10(2), pages 159-175, March.
    Full references (including those not matched with items on IDEAS)

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