Accounting for IGCSE & O level - Final Statements (Section 7 - No. 14)
Which statements are true regarding goodwill?
Goodwill is a premium paid by the buyer of a business.
Goodwill is always recognised on the acquiring company's books.
Goodwill is an intangible asset.
Goodwill is always internally generated by a business.
Explication
Goodwill is paid by the buyer and represents the value of the business in excess of net assets. It is recognised only if it comes from an acquisition, and it is always an intangible asset.