Goodwill

Dear Piyush,

Goodwill is an asset because it is the monetized value of the reputation and good name of a business concern. This reputation is also what enables a business to generate excessive profit and gives a company or any other business concern an edge or its competitors. This is why goodwill is considered an asset for a business.

As per the relevant Accounting Standard, Goodwill if purchased should be recognised as an asset in the balance sheet.

Self generated goodwill is not recorded.

All the best.

Regards, 

QLI Success Oriented Coaching for CA and CS,

www.qli.co.in

9029083303