Under what circumstances would Goodwill increase?

Technically Goodwill can increase if the company re-assesses its value and finds that it is worth more, but that is rare. What usually happens is 1 of 2 scenarios:

1. The company gets acquired or bought out and Goodwill changes as a result since it’s an accounting “plug” for the purchase price in an acquisition.

2. The company acquires another company and pays more than what its assets are worth – this is then reflected in the Goodwill number.