Forum Archive Index - November 2000

["G Stolwyk" <stolwyk@wave.co.nz>]

 

 

Hugh,

 

Another way of looking at it:

 

Say, somebody meets a beautiful woman.

Normally, he would take a lady to a 3 star restaurant.

 

However, to build up goodwill, he takes her out to a 5 star dinner instead.

 

She is impressed and shows a lot of goodwill. He feels that her goodwill component "is well above her net asset value!"

 

So much so, that he becomes bold and asks her to go home with him; she agrees!

 

Once home, it turns out to be a big disappointment.

 

He now feels that he paid too much for goodwill; after all, he could have taken her to a much cheaper 3 star dinner!

 

He now considers her to be worth less than net asset value and feels that he paid for negative goodwill!

 

And, because the dinner was not with a company client but was a  private one instead, this goodwill is not tax deductable!!

 

Horrors!

 

Till next time, Hugh!

 

Gerry