Goodwill is a compensation paid for the reputation established by a business. It can be realised only at the time of an acquisition. Hence, it is termed as an Imaginary Asset. A reputed organization will obviously be acquired at a higher rate than their original value due to the high regard it has earned over the course of time.
Related Articles
Intangible
An intangible is an asset type that is not tangible or of physical substance, over which a debtor can grant a security interest in, to secure the payment and performance of an obligation. Common examples of intangible assets of a debtor are its ...
Assets
Assets are anything tangible or intangible that adds value when owned by a business. They are of economic benefit too, as they increase the value of a business. Assets can either be expressed in cash or can be converted to cash. Assets are of two ...
Types of Accounts
According to the double entry system of bookkeeping, there are three types of accounts that help you to maintain an error-free record of your journal entries. Each account type has a rule to identify its debit and credit aspect called as the Golden ...