Der Begriff Badwill steht dem Goodwill gegenüber, der den Unterschied zwischen Preis und Substanzwert für den Regelfall beschreibt, in denen der Preis höher als der Substanzwert ist. Gelegentlich sind die Ertragsaussichten einer Gesellschaft aber so abträglich einzuschätzen, daß der Earned value unter dem Substanzwert (Buchwert) liegt.
• This unfavorable prognosis can arise if the previous managing director fails to update the business plan or if the employees are insufficiently trained or motivated.
• Likewise, a business plan that is good in itself could be devalued, for example because new competitors enter the market or because the business model is becoming obsolete due to new technologies (keyword: sales via e-commerce).
• Equally, employees could behave in a harmful way and, for example, have adversely affected the company's reputation.
Attention: If there is badwill in a transaction, this does not mean that the company is over-indebted. This term is not about the amount of debt.
In such cases the question to be answered is whether the company cannot be broken down and the individual assets that make up the substance (land, machinery and storage) can be sold separately, so that the total proceeds from the sale exceed the earnings value.
The buyer is allowed to pass the difference between the price and the book value that Bad-wants on his balance sheet. According to the IAS, the badwill can be attributed to the income statement for 5 to a maximum of 20 years.
Value-adding activities exist when a buyer can take over a company with badwill and then either, revising the previous business plan, leads it better or can break it down (because the parties involved meanwhile agree) and with the individual recycling of the parts achieves a revenue that exceeds the purchase price.