Goodwill is an intangible asset, the value of which is recorded on the acquiring company's balance sheet as the difference between what it paid for the acquisition and the acquired company's fair market value, or book value.
Goodwill of a Company = Purchase Price - Book Value of Company.
Goodwill is no longer amortized, but, to comply with FASB Rule 142, Accounting for Goodwill and Intangible Assets, it must pass an annual impairment test, to determine if the goodwill is still worth what was paid for it. If not, then it has to be written down, which will diminish stockholder equity, and may trigger covenants on any debts that the acquiring company has issued, and thus, imposes a risk for current stockholders. Such is the current case with Expedia, as is illustrated by this article: Tracking the Numbers - WSJ.com.