Goodwill is considered as
Goodwill is considered as
Solution
Goodwill is considered as an Intangible asset.
Goodwill represents the value of a firm's reputation, brand name, customer loyalty, and business connections that help generate superior earnings. Since it lacks physical existence but still holds economic value, it falls under intangible assets.
Why other options are incorrect:
Tangible Asset - These assets have physical existence (like machinery, buildings, vehicles). Goodwill cannot be seen or touched, so it's not tangible.
Fictitious Asset - These are not real assets but expenses or losses temporarily shown on the asset side of Balance Sheet until written off (like preliminary expenses, discount on issue of debentures). Goodwill is a genuine asset with actual value, not a deferred expense.
Current Asset - These are assets expected to be converted into cash within one operating cycle or one year (like stock, debtors, cash). Goodwill is a non-current asset as it provides benefits over multiple years and cannot be readily converted to cash.
Goodwill appears under the head "Non-Current Assets" → "Intangible Assets" in the Balance Sheet as per Schedule III of the Companies Act, 2013.
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