what is hidden goodwill?
Answers
Answer:
Hidden goodwill is the excess of desired total capital of the firm over the actual combined capital of all partner. Following is the accounting treatment of Hidden Goodwill: Value of Hidden Goodwill =Capitalised value of firm -Net worth
Answer:
Hidden Goodwill means the value of goodwill that is not specified at the time of admission of a partner. ... In other words, we can say hidden Goodwill is the Inferred Goodwill. This is not given in question but is implied from brought in capital by the new partner for his share in the firm.
Explanation:
Hidden goodwill. When the value of goodwill is not given in the question, it has to be calculated on the basis of total capital/net worth of the firm and profit sharing ratio. X and Y are partners with capitals of ₹ 10,000 each. They admit Z as a partner for 1/4th share in the profits of the firm.