state the treatment of goodwill as per AS-26.
Answers
Answer:
As we know that the Goodwill is an intangible asset.at the time of admission of new partner who requires the right to share the future profit of firm must compensate by the existing partner who have sacrificed their existing share.we can record Goodwill by two method first is premium and second year revaluation
Answer:
Treatment of goodwill as per AS-26: Internally produced goodwill should not be considered an associate plus because it is not a diagnosable resource that may be managed by the organization and that can be valued.
Explanation:
On the balance sheet of the acquiring company, goodwill is listed as an intangible asset under the long-term assets category. Because goodwill is not a physical asset like real estate or machinery, it is referred to as an intangible (or non-current) asset. Only after receiving payment in the form of money or money's worth is goodwill documented in the books. Goodwill Account cannot be raised because there is no consideration given for it in the event of admittance, retirement, death, or a change in the profit-sharing distribution among current partners. When anything satisfies the requirements for an intangible asset, it is likely that the enterprise would gain economically in the future, and the asset's cost can be accurately determined, AS-26 is applicable.
The cost of acquiring and producing an intangible asset internally is subject to these recognized requirements. According to AS 26 only purchases of goodwill that result in a cash or other form of payment for the firm are recorded in the book of accounts.
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