9 lines
625 B
Markdown
9 lines
625 B
Markdown
Goodwill appears on the _purchasing_ company's balance sheet when they acquire another company and pay _more_ than what the assets are worth on paper. That premium — paid for things like reputation, loyal customers, good location — is recorded as goodwill.
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Why the others are wrong:
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- **A)** Brand and trademarks are _intangible assets_, not goodwill specifically
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- **C)** Goodwill is just one component of intangible assets, not all of them
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- **D)** Future earnings aren't recorded on the balance sheet at all
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A simple way to remember it: **Goodwill = what you overpaid, and why** (reputation, customer loyalty, etc.) |