Issues involving goodwill and the liquidation of a partnership. Your client has been asked to invest in a partnership which will develop a piece of real estate for commercial use. It is estimated that...

Issues involving goodwill and the liquidation of a partnership. Your client has been asked to invest in a partnership which will develop a piece of real estate for commercial use. It is estimated that the development will occur over three years after which time the partnership will be liquidated. After reviewing selected historical and prospective financial information, your client has asked you to provide answers to the following questions:

1. I thought goodwill could only be recorded by a company if it purchased another company. Why does the historical balance sheet show goodwill as an asset even though the partnership has not acquired any other companies?