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Goodwill is considered which category of asset?

Answer and explanation

Correct answer: Intangible asset

Goodwill has no physical form, but it represents the economic value arising from a firm’s reputation, customer loyalty and ability to earn higher profits. Therefore, it is classified as an intangible asset. It is not a tangible asset because it cannot be seen or touched. Exam tip: Assets such as goodwill, patents and trademarks, which have value without physical substance, are intangible assets.

Related tags

GoodwillIntangible AssetPartnership AccountsAsset ClassificationPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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