Inflating intangible assets played a large part in the downfall of ABC Learning Centres, to note the first example that comes to mind. The worst area of abuse is goodwill applied to takeovers. That's why you have to be cautious when management is on the lookout for acquisitions.
As you state, goodwill can be calculated as the fair market value of identifiable assets and liabilities subtracted from the purchase price of the business.
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