Goodwill valuation
Goodwill valuation is the process of estimating the value of a business's goodwill, meaning the value of its reputation, customer relationships and other intangible advantages beyond its identifiable assets. It is a valuation and accounting term rather than a legal one, usually performed by chartered business valuators or accountants in sales, disputes and tax planning.
How BC law treats it
There is no BC statute on how goodwill is valued. The most relevant legal point is that, in a business sale, the allocation of the purchase price among goodwill and other assets affects both parties' tax results and should be agreed in the purchase agreement.
What it means for your business
A seller should obtain a professional valuation before negotiating price, especially in a sale to a related party or a shareholder buyout.
Risks and common mistakes
Failing to agree on a purchase price allocation can lead to inconsistent tax filings and disputes with the Canada Revenue Agency.
For the full explanation, see our entry on Goodwill.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
