Goodwill amortized is ________________to the profit made during the year for calculating the cash flow from operating activities while preparing the cash flow statement of the company.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Added.
Goodwill amortised is a non cash expenditure which does not reduce profit of the company so it is added back to the net profit to prepare the cash flow statement.
Non-cash items such as depreciation, goodwill written-off, provisions, deferred taxes, etc., are to be added back.