Accounting treatment for Goodwill

Dear Pavithra Madam,

One small correction please. For Intangible asset, we will not tell it as depreciation. We should call it as amortisation.

With respect to goodwill, since it is not a self-generated one, it can be incorporated in our books of accounts as per AS-26. Any intangible asset should be intially recorded in the books of account at cost.

But before recognising the Goodwill, ensure whether the recognition criteria is satisfied under AS 26.

Conditions:

1. Whether future economic benefits flow to enterprise?

2. Is it possible to estimate the cost reliably?

If you get answer for these questions, i hope you can very well incorporate in the books of accounts.

Members, kindly rectify me if i am wrong.

in my humble openion this should be considered as purchased gudwill and amirtise till 5 years

Purchased goodwill can be capitalised but the future inflow of economic Benefits which should be reliably measured and then only capitalised if there is a deviation between them capitalise at cost and impaire the goodwill

No question of Goodwill to be amortized,If firm earning capacity increased in subsequent years Goodwill Get increased.