Goodwill Gives Rise to Concerns (WSJ)

Big write-offs put spotlight on S&P 500 companies whose goodwill exceeds market cap.

Boston Scientific, Hewlett-Packard and Microsoft have all taken write-offs of goodwill in response to poorly performing acquisitions. The Wall Street Journal identified a number of companies whose balance sheets include substantial amounts of goodwill, which measures the amount paid for a acquisition in excess of the value of the acquired company’s hard assets.

The Journal found six S&P 500 companies that have goodwill that exceeds the market value for the entire company, a relationship that it says could point to future write-offs, including Sealed Air, Frontier Communications, and Nasdaq OMX.

 

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