According to AS-26 on Intangible Assets.

(A) Internally generated goodwill should not be recognised as an asset
(B) Self generated goodwill is accounted for in the books and shown as asset
(C) Intangible assets should be written off as early as possible but not exceedingly its estimated life.
(D) Purchased goodwill is not recognised as asset
(E) Can be written off even beyond 10 years depending upon the nature of asset

Choose the correct answer from the options given below.

(A) and (C) only

The correct answer is Option (4) → (A) and (C) only

The Standard comes into effect in respect of expenditure incurred on intangible items during the accounting periods commencing on or after April 1, 2003. As per the Standard, Intangible Asset under AS 26 is defined as an identifiable, non monetary, without physical existence and held for use in the production or supply of goods or services for rental to others or for administrative purposes.

Significant requirements of AS 26 w.r.t Intangible Assets:

1. Intangible asset should be recognised by fulfilling the criteria as recognised under AS 26.
2. If an in asset does not satisfy recognition criteria, it should be expensed.
3. Internally generated goodwill should not be recognised as an asset.
4. Internally generated brands, mastheads, and publishing titles and other similar in substance should not be recognised as intangible assets.
5. Internally generated assets other than the goodwill, brands, mastheads, and publishing titles may be recognised provided they satisfy recognition criteria as prescribed by AS 26.
6. Intangible assets should be written off as early as possible but not exceeding its estimated life, which normally should not be beyond 10 years.