Economics · Accounting for Goodwill
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Internally generated goodwill is recognized as an intangible asset in the books of accounts and can be carried forward indefinitely. Reason R: Purchased goodwill can be accounted for in the books as an asset and should be written off as early as possible, typically not exceeding 10 years. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is correct but R is not correct
- 2Both A and R are correct but R is NOT the correct explanation of A
- 3Both A and R are correct and R is the correct explanation of A
- 4A is not correct but R is correct✓
Correct answer
A is not correct but R is correct
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