Question

Which of the following is not true in relation to goodwill?

Options

• It is an intangible asset.

• It is fictitious asset.

• It has a realisable value.

• None of the above.

Answer 1

It is fictitious asset.

Explanation:

Goodwill is not a fictitious asset; it is an intangible asset with a realisable value. Fictitious assets, like preliminary expenses or discounts on issue of shares, do not have any realisable value, whereas goodwill does, especially when a business is sold.