Which statement among the following is NOT true about Goodwill?
- AGoodwill is the value of the reputation of a firm in respect of the profits expected in future, over and above the normal profits.
- BGoodwill is the capitalized value attached to the differential profit capacity of a business.
- CGoodwill can exist when the firm does not earn super profits, means any firm that earns normal profits or is incurring losses has goodwill.
- DGoodwill is an intangible asset.
Solution & Step-by-step Explanation
Goodwill fundamentally depends on the ability of a firm to earn super profits (profits higher than normal industry expectations). A firm consistently incurring losses or earning merely normal profit generally does not possess commercial goodwill value. Thus, statement C is false.