Lesson eLearning

Under Schedule III of the Companies Act, 2013, goodwill is shown in the balance sheet under which head?

easy MCQ 1 mark Class 12 · Accountancy · Goodwill Nature and Valuation
  1. Non‑current assets – Other financial assets
  2. Non‑current assets – Intangible assets
  3. Current assets – Inventories
  4. Current assets – Trade receivables
Answer
Non‑current assets – Intangible assets

The correct answer is Non‑current assets – Intangible assets — Hence it is placed under the head "Non‑current assets – Intangible assets".

Step-by-step solution

  1. Identify the schedule that prescribes presentation of assets in the balance sheet.
  2. Goodwill is an intangible asset, not a financial asset.
  3. Hence it is placed under the head "Non‑current assets – Intangible assets".
Common mistake: Choosing "Other financial assets" assuming goodwill is a financial asset

Concept tested: Classification of goodwill in balance sheet

Published · How this solution was prepared and checked

← All Goodwill Nature and Valuation questions