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Which intangible asset should be disclosed separately on the balance sheet?

A. Customer lists.
B. Goodwill.
C. Copyrights.
D. Paten

1 Answer

3 votes

Final answer:

Goodwill should be disclosed separately on the balance sheet, as it represents the excess value over the fair market value of an acquired company and reflects non-physical assets that can affect earnings.

Step-by-step explanation:

The question asks which intangible asset should be disclosed separately on the balance sheet. Among the options provided, Goodwill is often singled out for separate disclosure on a company's balance sheet. Goodwill represents the excess value paid over the fair market value of an acquired company's net assets. It reflects non-physical assets that may contribute to earnings, such as brand reputation, customer relations, and intellectual property. Although intangible assets like customer lists, copyrights, and patents are also important components of a company's overall intellectual property, Goodwill is typically the intangible asset required to be disclosed separately due to its unique nature and the way it is calculated following a business combination.

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