The problem is how goodwill is recognised originally, it's...

The problem is how goodwill is recognised originally, it's essentially the difference a company pays for another's assets compared to their actual carrying value on the balance sheet. Given the rules (and limitations) of accounting policy where everything needs to balance on the balance sheet this is the only way that the transaction can be reflected. In reality however this is a naive approach to think that the only reason someone will pay a premium for something is because they will realise an near term equivalent effect in cash generation from the deal, and hence why these amounts have to be discounted in future earnings when this doesn't eventuate. It definitely doesn't mean the company paid to much for its acquisitions or that down the track it won't make ten fold of what the current value is in goodwill, this is why accounting profits are not used as a basis for investment decisions as they are inherently flawed in that regard.