Nature of goodwill

Nature of goodwill

The nature of goodwill can be described as follows:

i.            Goodwill is an intangible fixed asset. It is intangible because it has no physical existence. It cannot be seen or touched.

ii.            It has a definite value depending on the profitability of the business enterprise.

iii.            It cannot be separated from the business.

iv.            It helps in earning more profit and attracts more customers.

v.            It can be purchased or sold only when the business is purchased or sold in full or in part.