Assertion (A): Goodwill is valued at the time of the firm’s reconstitution because gaining partners have to compensate the sacrificing partners for gaining profit share.

Assertion (A): Goodwill is valued at the time of the firm’s reconstitution because gaining partners have to compensate the sacrificing partners for gaining profit share.

Reason (R): Goodwill is an intangible asset which is recognised in the books of account if an amount is paid for it.

In the context of the above two statements, which of the following is correct?

In the context of the above two statements, which of the following is correct?

(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).

(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

(c) Assertion (A) is correct but the Reason (R) is not correct.

(d) Both Assertion (A) and Reason (R) are incorrect.