Goodwill refers to the extra value of a business beyond the net value of its tangible assets, representing the reputation and name recognition that the business has earned. Goodwill is an intangible asset that exists because of a firm's reputation and depends on several factors such as location, time in business, nature of the business, management efficiency, past and future profits, stability, and future prospects. Goodwill can be valued using different methods that take into account the specific circumstances for valuation.