how to find hidden goodwill?
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· TREATMENT OF HIDDEN GOODWILL:
· Step I: Calculate the total capital of the firm on the basis of the capital brought by the new partner. It is calculated as follow:
· Step II: Find out the combined capital of all the partners. It is calculated as follow:
· Step III: Determine the Hidden Goodwill as under:
nikku08:
how to determine hidden goodwill
Value of Hidden Goodwill = Capitalized Value of Firm – Net Worth.
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