Question

why the value of goodwill need to be determined on death of a Partner?​

Answer 1

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it's your ans-..

1. In case of a retirement or death of a partner, the continuing partner will gain in terms of profit sharing ratio.

2. For this purpose, goodwill need to be determined on the date of the retirement or death of a partner and adjusted through the capital accounts of a partner.

3. Retiring partner's share of goodwill is then ascertained which depends on the share of profits the retiring partner has been getting.

4. The retiring partner's capital account is credited with his share of goodwill and the amount is debited to the remaining partners' capital accounts in the ratio of their gain.

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