How many types of goodwill are there?

How many types of goodwill are there?

two

What are the elements of goodwill?

The elements or factors that a company is paying extra for or that are represented as goodwill are things such as a company’s good reputation, a solid (loyal) customer or client base, brand identity and recognition, an especially talented workforce, and proprietary technology.

Is not a fictitious asset?

They are recorded as assets in financial statements only to be written off later. Promotional expenses, Preliminary expenses, Discount allowed on issue of shares and Loss incurred on issue of debentures are examples of fictitious assets. Prepaid rent is not a fictitious asset.

Does Goodwill has a realizable value?

Intangible asset in case of Goodwill is the value added to the firm which is realizable in nature, whereas fictitious assets do not posses any realizable value as they are created due to accounting entry due to the occurrence of deferred revenue expenditure.

What does fictitious asset mean?

Fictitious asset is not a real asset but deferred expenses that are shown in assets in the balance sheet. Expenses or losses that are not written off during the accounting period of occurrence because they give long-term benefit over a period of time are categorized as fictitious assets.

Is Depreciation a fictitious asset?

Difference between Fictitious Assets and Fixed Assets In the same manner, fictitious assets have no realizable value. They are only placed on the balance sheet as per the amount that has already been paid. It cannot be depreciated, or sold once it is paid for.

What is meaning of fictitious?

adjective. created, taken, or assumed for the sake of concealment; not genuine; false: fictitious names. of, relating to, or consisting of fiction; imaginatively produced or set forth; created by the imagination: a fictitious hero.

How will you verify the fictitious asset?

Auditor should verify that expenses incurred are properly authorised by a responsible person. 2. He should ensure that fictitious assets are treated as deferred revenue expenditure. The auditor should confirm that the asset is disclosed in the Balance Sheet at the amount of expenditure incurred less amount written off.

What is the difference between fictitious assets and intangible assets?

Intangible assets and intellectual assets do not have physical existence. Fictitious assets are the deffered revenue expenditure as well as intangible assets i.e advertisement expenses, discount on issue of shares and debentures. Intangible assets are those which have an economic value and a specific life.

How do I know if my balance sheet is audited?

Verifying financial statements is possible in several ways. Request audited financial statements signed by a certified public accountant. Further investigation of the financial statements is still necessary, but starting with audited statements offers initial verification. Ask for bank statements to verify deposits.

Is advertisement suspense a fictitious asset?

This capitalized Advertisement Expenditure is called Deferred Advertisement Expenditure or ‘Advertisement Suspense Account’ . Such Deferred Revenue Expenditure is shown in the Balance Sheet as an asset till it is written off to Profit & Loss A/c.

Which one of the following is an example of fictitious asset?

Example of Fictitious Assets :- Major examples of fictitious asset are : profit and loss (dr. bal), discount on issue of shares and debentures, preliminary expenses, underwriting commission, advertisement suspense a/c etc.

How do you write off fictitious assets?

Fictitious Asset write off in Cash Flow Statement Fictitious asset write off is the non-cash flow expense, it’s debit in the income statement.

Is fictitious assets a current assets?

Those assets which are used or utilized within the period of one year are known as Current Asset. The Fictitious word, itself says “fake”.

What is the treatment of fictitious assets?

Fictitious assets have no physical existence or you can say these are intangible assets. These type of assets are just expenses which are treated as assets. They have no realizable value. They are amortized or written off in one then more profitable financial year.

Is Prepaid expenses a fictitious asset?

Fictitious Assets are those assets which are not represented by anything concrete or tangible. There are no tangible properties behind such assets, preliminary expenses is one of the example. Other examples are like Goodwill, Prepaid Expenses etc.

How many types of current assets are there?

The current assets include petty cash, cash on hand, cash in the bank, cash advance, short term loan, accounts receivables, inventories, short term staff loan, short term investment, and prepaid expenses. For example, accounts receivable are expected to be collected as cash within one year.

What are the 5 intangible assets?

The main types of intangible assets are Goodwill, brand equity, Intellectual properties (Trade Secrets, Patents, Trademark and Copywrites), licensing, Customer lists, and R&D.