The Ins and Outs of Average Annual Value for Goodwill in Partner Buyouts

Hands tear money isolated on white backgroundAnd why new partners may not like it.

By Marc Rosenberg
Retirements & Buyouts

When trying to calculate the goodwill payable to a retiring partner, one option is the AAV method.

The letters stand for “Average Annual Value,” but these words don’t adequately describe the system. I’ve always felt that a better name would be “cumulative value method,” as you will see.