why is goodwill considered as an intangible asset but not a fictitious asset?
Goodwill is the value of a firm's reputation, its good brand name and favourable contacts in the market. Goodwill is considered as an intangible asset of the firm. It means it can not be seen or touched like other assets of the firm. It does not have any physical existence. It just has a capability to help the business in earning more and more profits. On the contrary, fictitious assets are neither tangible nor intangible assets. They are the expenses or losses which are still to be charged (debited) from the profit.
Effort or hard work of the management and the payment made to acquire the goodwill, both brings the firm in a position to earn extra or higher amount of profits. On the other hand, fictitious assets are the expenses of a firm such as expenditure on formation of business, debit balance of profit and loss account, deferred revenue expenditure, etc., which are still to be charged against the profits. They all have a debit balance and can not be considered as assets of the firm.