Self-generated Goodwill is not purchased or bought for consideration but rather generated as a result of the hard work and efforts of the members of the firm. It, therefore, arises because of factors such as consistent quality, satisfied customers, favorable location, etc. Since all these factors are internal to an organization hence the goodwill is an internally generated goodwill boosting the revenues for the firm.
Features of Self-generated Goodwill
- As mentioned above, it arises out of the efforts of a firm over the years and hence is internally generated.
- Since the value of internally generated goodwill cannot be traced back to a cost source hence its accurate and reliable value is very difficult to determine.
- The valuation is based on the perspective of the valuer and hence is completely subjective.
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