Listing large amounts of goodwill as an asset is another way that savings and loans are able to hide the fact that they are insolvent.

Question

Quizplus · Accepted Answer

When a savings and loan lists large amounts of goodwill as an asset, it artificially inflates their net worth and hides the fact that they may be insolvent. This is because goodwill is an intangible asset that represents the value of a company's reputation, brand, and relationships with customers. However, it is difficult to quantify and can be easily manipulated by management to create a rosy picture of the company's financial health. As a result, regulators and investors may be misled about the true financial position of the savings and loans.

Listing Large Amounts of Goodwill as an Asset Is Another