Question

According to AS-26 which goodwill is recorded in the books?

Options

• Purchased goodwill

• Self-generated goodwill

• Both Purchased goodwill and Self-generated goodwill.

• None of the above

Answer 1

Purchased goodwill

Explanation:

An intangible asset is a non-physical, non-monetary asset kept for use in the production or delivery of products and services, or for renting to others, among other things.

All businesses should use AS 26 to account for intangible assets, with the exception of:

1. Intangible assets that fall under the definition of another type of financial asset.
2. Minerals, oil, natural gas, and other non-regenerative resources exploration and development rights and expenditures.
3. Contracts with policyholders generate intangible assets in the insurance industry.
4. Expenses related to termination benefits.