Why is “Goodwill” shown as an asset when it cannot be touched or seen?
this question came in my test and I want to know answer
Posted by:
Avni
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1
17
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2025-08-19
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Rahul
Aug 19, 2025
because it increases the earning power of a business, even if it can’t be touched. For ex. if two shops sell the same products, but one has loyal customers and a strong reputation, that shop can earn more. The extra value it has because of its reputation is called Goodwill, so it’s treated as an asset in accounts.
17
because it increases the earning power of a business, even if it can’t be touched. For ex. if two shops sell the same products, but one has loyal customers and a strong reputation, that shop can earn more. The extra value it has because of its reputation is called Goodwill, so it’s treated as an asset in accounts.