Question

Write the need for valuation goodwill

Answer 1

Goodwill is an intangible asset which places an enterprise at an advantageous position due to which the enterprise is able to earn high profits.

need for valuing goodwill

i. when there is a change in profit sharing ratio.

ii. when new partner is admitted

iii. when a partner dies.

iv. when 2 or more firm amalgamate

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Answer 2

Answer:

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.

Explanation:

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