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CMA Intermediate · Corporate Accounting and Auditing · Statement of Profit and Loss and Balance Sheet (Schedule III of Companies Act, 2013)

Under Schedule III, where should 'Goodwill' and 'Computer software' of a company be shown in the Balance Sheet?

Goodwill and computer software are shown as intangible assets under the head Non-current assets in the Schedule III balance sheet. They are identifiable or recognised assets without physical substance, held for long-term use, so they are not current assets or investments.

  1. AUnder Non-current assets as Intangible assetsCorrect
  2. BUnder Current assets as Other current assets
  3. CUnder Non-current investments
  4. DUnder Other non-current assets as miscellaneous expenditure

Explanation

Goodwill and computer software lack physical substance and are held for long-term use, so they are classified as intangible assets within Non-current assets. They are not investments or current assets.

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