Apple and Google algorithm for acquisition goodwill

When a company makes an acquisition it must identify and value the assets of the target and allocate net purchase price to these assets. If net purchase price exceeds identifiable net assets the balance is assigned to goodwill.

Now consider Apple and Google acquisitions over the past two years, for which these companies disclosed specific purchase price and associated goodwill.

• Apple acquires Beats (music streaming): purchase price = $2.6 billion; goodwill = $2.2 billion. Goodwill percentage of purchase price = 85%
• Google acquires Waze (crowd-source traffic information): purchase price = $969 million; goodwill = $841 million. Goodwill percentage = 87%
• Google acquires Nest Labs (smarthome devices): purchase price = $2.6 billion; goodwill = $2.3 billion. Goodwill percentage = 88%
• Google acquires Dropcam (smarthome monitoring): purchase price = $515 million; goodwill = $452 million. Goodwill percentage = 87%
• Google acquires Skybox (nano-satellites): purchase price = $478 million; goodwill = $388 million. Goodwill percentage = 81%

No need to hire a Duff & Phelps or Houlihan Lokey. Looks like the algorithm is simple: goodwill allocation percentage must be a two-digit number staring with an 8!