No, goodwill is not a current asset. Goodwill is an intangible asset, meaning that it is not associated with a physical item like a building or piece of equipment. Intangible assets are never considered current assets, no matter the period for which they provide economic value. Goodwill specifically is also considered to have an indefinite life, since as of 2001 it no longer needs to be amortized for accounting purposes.
Is Goodwill a Current Asset? FAQs
No, goodwill is not considered to be a current asset. It is an intangible asset that arises when one company purchases another for a premium above the fair value of its net assets.
Goodwill is an intangible asset, meaning that it is not associated with a physical item like a building or piece of equipment.
Goodwill is an intangible asset that does not qualify as a current asset due to the indefinite life it has for accounting purposes. It is listed as an asset on the balance sheet and included in total assets, but it cannot be converted to cash quickly.
Goodwill specifically is considered to have an indefinite life, since as of 2001, it no longer needs to be amortized for accounting purposes.
Goodwill is recorded as an asset on the balance sheet and does not expire or change in value over time unless there is an impairment event that occurs. The carrying value of goodwill may be adjusted due to acquisitions or disposals of businesses for it to reflect its fair market value at any given time.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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