Imagine a box that is made up of materials worth $10. However, the box has the very peculiar property that a $100 appears in it on the first Monday of each mont

Imagine a box that is made up of materials worth $10. However, the box has the very peculiar property that a $100 appears in it on the first Monday of each month. Ask yourself how much you would pay to own this box? Most rational people will be willing to pay more than $10 (the book value of the box). The difference between what you pay for the box and the value of the materials of the box is recorded as "goodwill". The goodwill is clearly an asset (it's the value ascribed to the future cash streams from the box). This analogy extends to companies if you think of them as a source of future cash streams and should give you some intuition for why the accounting is done this way