This funds flow account represents additions to the Goodwill account (v2400) over the last year. Goodwill results from the purchase of identifiable assets at a cost exceeding the fair-market value. Additions to Goodwill (v2400.01) most commonly occur as a result of a merger or acquisition in which the purchase method of accounting is used. If the buyer pays a price that exceeds the fair value of the seller's revalued assets, the excess must be recorded as Goodwill (v2400) on the Balance Sheet of the combined companies.