goodwill

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Asheshwar Das (Querist)

23 June 2009 What is goodwill.
option:-
a. tangible asset
b. intangible asset
c. ficticious asset
d. is is not asset

Please answer and give the cause also.

Guest

Guest (Expert)

23 June 2009 Goodwill is an 'Intangible asset'

An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today's marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company's patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.

Difference: -

Very often these two terms are considered identical but there is significant difference between these two terms. Intangible assets refer to those fixed assets that have no physical status at all viz, goodwill, patentright, copyright etc. The Intangible assets are written off after a specified period Fictitious assets also have no physical existence but they only include the assets having the nature of deffered revenue expenditures viz, deffered advertisement expenses and discount on issue of shares or debentures. These are the assets out of which benefit or profit for more than one accounting is availed. The main reason for confusion is that both have no physical status but the discussions above are big enough for all to understand the difference between the two terms.