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under what circumstance is it appropriate to record goodwill in the accounts? How should goodwill, properly...

under what circumstance is it appropriate to record goodwill in the accounts? How should goodwill, properly recorded on the books, be written off in order to conform with generally accepted accounting principles

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Company record the goodwill when entire business is purchased or in other words we can say that goodwill will recorded when an organization buys it. Goodwill will not be reordered when it build up. When company pays more then total fair value of other company then difference will be goodwill

So, Goodwill

=Total payment - fair value of the assets acquired

Company can write off goodwill if it determines that value of goodwill is impaired.

The entry for write off goodwill is as under

Description

Debit $

Credit $

Loss on impairment...dr

xx

Goodwill A/C...cr

xx
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