Goodwill is created only by buying a business, never by building one. It is the accounting residual that makes the purchase price balance. It is not amortised under current US rules; instead it is tested at least yearly, and a failed test produces an impairment.
Large goodwill balances mean the company has grown by acquisition, which matters for return-on-invested-capital: the full purchase price stays in the denominator, so an acquisitive company cannot hide a bad deal behind organic profit.
Example: Northwind Tools paid $310M for Northwind Cloud, of which $70M was identifiable technology and customer relationships. The remaining $240M sits as goodwill, 42% of total shareholders-equity.
Related: intangible-assets, impairment, return-on-invested-capital, tangible-book-value, non-current-assets