What is meant by Self-generated Goodwill?
Self-generated Goodwill (Non-Purchased Goodwill):-
Self-generated goodwill is internally generated goodwill that arises from a number of factors 9such as favourable location, efficient management, good quality of products, etc.) that a running business possesses due to which it is able to earn higher profits.
Features of Self-generated Goodwill or Non-purchased Goodwill:
(i) It is generated internally, generally over the years.
(ii) Its valuation is a subjective assessment of the valuer, being not based on an evidence.
(iii) As per AS-26, Intangible Assets, self-generated goodwill is not recognised as an asset.
Anurag Pathak Changed status to publish April 19, 2023