Why Goodwill is an intangible asset?
- Intangible assets can be produced or purchased by businesses.
- It may be seen as definite or indefinite, such as a contract or legal arrangement (for example, a brand name).
- A company's intangible assets do not appear on the balance sheet and do not have a documented book value.
- A company may find value in an intangible asset even though it lacks the obvious physical worth of a factory or piece of equipment, and it could make the difference between the firm's long-term success or failure.
- Tangible assets are financial assets that get their value from contractual claims, such as stocks and bonds.
- For instance, Coca-Cola wouldn't be nearly as profitable without the revenue generated by its brand recognition.
- 1 Despite not being a tangible asset that can be seen or touched, brand recognition can have a significant effect on increasing sales.
Which of the following is an intangible asset? (a) Goodwill (b) Receivables (c) Stock (d) Cash
Goodwill is an intangible asset. An asset that is not physical is said to be intangible. Such assets can be produced or purchased by businesses. No appearance on the balance sheet and not having documented book value is an intangible asset of a company.