Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
What is financial goodwill?
It isn't what most people on Yahoo seem to think it is and the continued misinformation about this on YA is a problem.
Fact: The only way to book goodwill on your balance sheet is to purchase a company.
All these other things that people keep posting about estimating the value of their brand name, capitalizing Steve Jobs's reputation, valuing their brand name recognition, etc and putting it on their balance sheet as "goodwill" are illegal, fraudulent, and completely silly. Sorry you disagree....
2 Answers
- MohammadLv 78 years agoFavorite Answer
1. I generally agree with the observation that "The only way to book goodwill on your balance sheet is to purchase a company.".
2. But consider a hypothetical situation when an individual of repute is 'allotted' huge amount of share capital without any financial consideration. The amount has to be capitalized as the amount is so huge that Profit and Loss A/c cannot bear it in one year. You have to give some name to the Capitalised Account - Goodwill or Something else. Goodwill seems to be a better choice in such a situation.
The journal entry will be:
Dr ??? .................. $500 million ... (Goodwill?)
Cr Share Capital ................ .................... .......... $500 million
Figures have been given just to understand the dimensions.
3. Of course, one has to consider as to what are the Accounting Rules say on the subject.
.
.
Source(s): Accountancy . . - 8 years ago
Where did you get your degree John? Phoenix Online. Your questions are filled with stupidity,
