Somebody correct me if I'm wrong but my understanding of goodwill is that it is calculated as the difference between the net asset value of an acquired company and its acquisition price; that is, Google buys Motorola for $12bb, net value of all Motorola's assets is say $8bb, then goodwill increments by $4bb.

Correct, then you typically write it off as a cost over a number of years

Goodwill is actually tested for impairment. Although it is generally amortized for valuation purposes.