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FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.2

FAR 31.205-49 Goodwill.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section defines goodwill as an unidentifiable intangible asset arising from a business combination when the purchase price exceeds the fair value of identifiable net assets. It makes all costs related to amortization, expensing, write-off, or write-down of goodwill unallowable for government contracts.

Applies to: Contractors incurring costs related to goodwill

Key terms: goodwill · unidentifiable intangible asset · purchase method of accounting · business combination · amortization

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

Goodwill, an unidentifiable intangible asset, originates under the purchase method of accounting for a business combination when the price paid by the acquiring company exceeds the sum of the identifiable individual assets acquired less liabilities assumed, based upon their fair values. The excess is commonly referred to as goodwill. Goodwill may arise from the acquisition of a company as a whole or a portion thereof. Any costs for amortization, expensing, write-off, or write-down of goodwill (however represented) are unallowable.

← 31.205-48 Research and development costs. · 31.205-50 [Reserved] →

Rule changes for FAR Part 31

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 31.205-49 Goodwill · SpendQuery