Valuating Business Interest – Enterprise Versus Personal Goodwill
Often a party or both parties to a dissolution of marriage case are tasked with having their interest in their business entity valued. Valuing a business for purposes of a dissolution of marriage case is typically a very comprehensive and complicated exercise. One of the aspects to valuing a business is the determination of whether the spouse has goodwill in his or her business, whether there is any value to this goodwill, and whether the goodwill is “personal” or “enterprise” goodwill. The latter part of this analysis is very important, because in Florida, a spouse’s personal goodwill is not subject to equitable distribution. There is a recent article in the Florida Bar Family Law Section Commentator Volume XXV, No.2 issue authored by Cinnamon O’Shell Turk, CPA, found at the attached link that we encourage you to review if you, your spouse, or someone you know, are involved in a dissolution of marriage case, and there is a business or businesses at issue. The article explains the difference in personal goodwill versus enterprise goodwill, and it is informative on how goodwill plays a part, if at all, in the financial aspect of a parties’ divorce.