Which term refers to an intangible property that represents added business value?

Goodwill is a term used in accounting and business that specifically refers to an intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets. It represents the extra value that a company has due to its brand reputation, customer relationships, employee relations, and other unique factors that contribute to a company's earning potential.

When a business operates successfully over time, it often builds a positive reputation and loyal customer base, contributing to its overall value beyond just tangible assets like equipment or inventory. This intangible value, which cannot be easily quantified and does not have a physical presence, is what we refer to as goodwill.

Understanding goodwill is crucial for accounting and financial reporting, as it plays a significant role in business valuations, mergers, and acquisitions. It is also essential to recognize that goodwill can fluctuate based on the business's performance and market conditions.