What is conclusion of valuation of goodwill
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Following points will be concluded if we Calculate goodwill--
1/ we know about the change in profit sharing ratio among existing partners.
2/Which new partner is added and which existing partner is retired from business at what value of goodwill.
3//Amalgamation of partnership firm also concluded by valuation of goodwill.
1/ we know about the change in profit sharing ratio among existing partners.
2/Which new partner is added and which existing partner is retired from business at what value of goodwill.
3//Amalgamation of partnership firm also concluded by valuation of goodwill.
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Explanation:
Valuation of goodwill is an important phenomenon at the time of business combination, amalgamation,etc.
The value of goodwill is reconized only when business is sold or transferred, irrespective of the fact that goodwill was built over the year.
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