Question

explain the natures of goodwill​

Answer 1

Answer:

Goodwill can be sold or purchased with entire business. It is valuable only when entire business is sold or purchased. ... It represents a non-physical value, intangible in nature, goodwill does not depreciate by wear and tear. However, the goodwill becomes a fictitious asset if it appears in the books of a losing concern.

Explanation:

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Answer 2

Features of Goodwill:

• 1. Goodwill has no existence separate from business, i.e. goodwill cannot exist independently of business. It is attached to the business.
• 2. Goodwill can be sold or purchased with entire business. It is valuable only when entire business is sold or purchased.
• 3. The value of goodwill and the assessment of its existence is based upon subjective judgement of the valuer, inspite of different methods of its valuation.
• 4. It is difficult to place an exact value to goodwill since its value fluctuates from time due to changing circumstances of business.
• 5. It represents a non-physical value, intangible in nature, goodwill does not depreciate by wear and tear. However, the goodwill becomes a fictitious asset if it appears in the books of a losing concern.