Question

What is goodwill? Describe the various methods of valuation of goodwill at the time of admission
of a new parther.
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Answer 1

Goodwill is recorded in the books only when some consideration in money or money's worth is paid for it. Thus, in the context of a partnership firm, the need for valuation of goodwill arises at the time of: Change in the profit sharing ratio amongst the existing partners. Admission of a new partner.