UNIVERSITY GOODWILL AND ITS VALUATION

The notion of goodwill has deeply integrated into both financial and corporate law, as well as in contract law. Contracts of different contents often include the term ‘goodwill', though it is interpreted differently – both as an important asset acquired by companies through purchases and merges and as part of companies' reputations and brands. So far, the phenomenon of the university's goodwill has not been researched enough due to several reasons: the complicatedness of the university as both an important social and increasingly important economic phenomenon, the significance of the universities' other components and their interrelations, as well as its functions and recent changes facing European and other universities as major stakeholders in the global market of higher education. The authors have investigated the phenomenon of the university's goodwill in both aspects – as part of the university's reputation, image and brand developed in its mission, vision and values, and as an economic asset acquired through merges, amalgamations and other kinds of acquisitions. The phenomenon of the university's goodwill as part of its reputation is a real challenge for researchers as its character is purely qualitative and it is deeply rooted in its values and mission, so that its differentiation from other aspects of its reputation is hardly possible, taking into account its vague character and problematic valuation. Nevertheless, the authors believe that the university's goodwill as part of its brand and image is worth researchers' attention and offer a methodology designed to distinguish it from other components of its reputation and thus provide every stakeholder with a reliable enough tool for researching this interesting phenomenon. Recently, the phenomenon of the university's goodwill as part of its assets has been acquiring more significance due to the ongoing processes of structural reforms in the European Higher Education Area, in Russia, and other parts of the world, as following the national governments' roadmaps universities, of Finland, Russia and other countries merge, integrate, and combine their resources in various ways. It is of more quantitative character and can be valuated with economic methods. The paper considers three methods of valuation of the company's goodwill: average profits method, super profits method, and capitalisation method, and their possible application to valuation of the university's goodwill as an important economic asset, with a particular attention paid to the method of capitalisation. Combining qualitative and quantitative research methods and basing on systemic approach, the authors have attempted to tackle the phenomenon of the university's goodwill and offer their findings including a model of the university's goodwill, as well as grounds for further researches in the fields of economics, sociology and axiology.