Answer to Question #53105 in Accounting for Godvictor

Question

Differentiate between non-purchased goodwill and purchased goodwill

Answer 1

Goodwill can be classified into ‘purchased' and ‘non-purchased goodwill'.
Economists define the difference between the two as follows:
Purchased Goodwill arises from the acquisition of an existing business, while non-purchased goodwill has been built-up over time and cannot be verified objectively.