Assertion (A): Self-generated Goodwill is recognised in the books of account on reconstitution of a firm because the amount is exchanged between the gaining partner or partners and sacrificing partner or partners.
Assertion (A): Self-generated Goodwill is recognised in the books of account on reconstitution of a firm because the amount is exchanged between the gaining partner or partners and sacrificing partner or partners.
Reason (R): According to AS 26, Intangible Assets, Self-generated Goodwill is not recognised in the books of accounts because the value is not paid for it.
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) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish April 18, 2023
Ans – d)
Solution:-
Self-generated Goodwill is not recognised in the books and not recorded because the value is not paid for it. Thus, Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish April 18, 2023
