Question

how is goodwill value determined​

Answer 1

Answer:

In order to calculate goodwill, the fair market value of identifiable assets and liabilities of the company acquired is deducted from the purchase price. For instance, if company A acquired 100% of company B, but paid more than the net market value of company B, a goodwill occurs

Explanation:

Answer 2

Value of goodwill determine by many ways

In average method ....

firstly calculate average profits....

Average profit = sum of all year profits/ no of years...

After it value of goodwill determine by following formula ...

= Average profit* no of years purchase ....

Hope its helps u ☺️☺️☺️