Let's say you're in the market to buy a successful lemonade stand. Good location, good sales, smart operation.

You see one with $10 worth of lemons/water/sugar, a $20 table and $5 in cash. No debt, no contracts, no patents, just a dude and his lemonade stuff. That's total net assets of $35.

How much would you expect to pay for that business? It has to be more than $35, right? If you offered the owner $35, he'd tell you to take a hike. And if you bought identical assets - a table, lemons, water and sugar - and set up right next to him, he'd probably eat your lunch.

That excess you'd pay is real. Maybe you can't put your finger on what it is - the recipe, organizational know-how, the word-of-mouth or whatever, but it's real.

That's goodwill. If you think it's fictional, do an impairment te