Certified Valuation Analyst (CVA) Practice Exam 2026 – Your All-in-One Guide to Exam Success!

The introduction of the concept of goodwill was established through various IRS pronouncements, but the most significant pronouncement is Revenue Ruling 68-609. This particular ruling set forth guidelines and definitions regarding the treatment of goodwill in business valuations and tax contexts.

Goodwill represents the intangible value of a business that exceeds its identifiable assets. Revenue Ruling 68-609 provided a framework for recognizing goodwill as a separate identifiable asset for tax purposes, particularly in the context of corporate acquisitions and the valuation of closely held businesses. This ruling illustrated how goodwill could be evaluated and factored into the overall valuation of an entity.

The other choices do not pertain to the foundational establishment of goodwill in IRS guidance. For instance, ARM 34 and Revenue Ruling 98-34 address other tax matters and are not focused on defining goodwill. Additionally, IRS Revenue Procedure 2006-30 primarily deals with certain procedural aspects of tax practices rather than introducing the goodwill concept. Thus, Revenue Ruling 68-609 is the correct reference for the introduction of goodwill in IRS pronouncements.