If fixed assets are assets that are held for a long time, and a certai

QUESTION

If fixed assets are assets that are held for a long time, and a certain company has had goodwill for all of its years in business, then should its goodwill be considered a fixed asset?

What will be an ideal response?

ANSWER

Answer: Fixed assets are TANGIBLE assets that are held onto for a long time. Goodwill, though often held onto by companies for a very long time, is intangible. Therefore, it is considered an intangible asset.
Explanation: Goodwill is an intangible asset, so it cannot be considered a fixed asset (as fixed assets must also be tangible assets).