Goodwill on consolidation is classified in the statement of financial position as a/an:
A)current asset.
B)tangible asset.
C)intangible asset.
D)non-current liability.

Question

Quizplus · Accepted Answer

Goodwill on consolidation is an intangible asset that arises when a company acquires another company for a price higher than the fair value of its identifiable net assets. As it cannot be separately identified or measured, it can only be recorded as part of the cost of the acquisition and recognized as an asset in the consolidated statement of financial position. Goodwill is subject to annual impairment tests to assess whether its carrying amount exceeds its recoverable amount, and any impairment losses are recognized in profit or loss.

Goodwill on Consolidation Is Classified in the Statement of Financial