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mt54
Level 1

Cost of goods sold issues in Profit and Loss Statement

What account should be used to record the income for the payment of goodwill on the sale of the business?

2 Comments
Rustler
Level 15

Cost of goods sold issues in Profit and Loss Statement

It is normal income

 

how is the question related to the subject of the thread

qbteachmt
Level 15

Cost of goods sold issues in Profit and Loss Statement

If it is Payment, because you are allowing them to pay over time, you would have already been managing the initial buyout and posted an Other Asset balance = owed to you. Then, their Payment is part of the Other Asset, + any interest you charged them which is the only Income part to you.

 

If this is all the one transaction that is the sale, completed, then it is income, as it reflects the difference from Actual assets sold minus liability assumed.

 

Nothing here is COGS. Good will is an Intangible asset. There is no Cost for it.

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