How do you value goodwill?

In an M&A context, goodwill is an "intangible" asset that is typically valued by backing-into the difference between the amount an acquiror is willing to pay and the fair market value of the target's net assets. In other words, the Purchase Price less the FMV of Net Assets = Goodwill. The acquiror would then recognize this amount as an asset on its financial statements, subject to future adjustments and amortization.

Thankzs, Charles. Your response was very clear and helpful.