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Introduction of goodwill. |
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Answer» In Partnership Firm development of business depends upon continuous hard work, honesty, ability to take business risk and perception of partners. Because of these, firm creates different status or prestige in the market. Due to of this prestige or reputation, firm possesses to earn more profit than a common firm, specific and stable customer, special relationships. Monetary value of this prestige or reputation is called goodwill. The valuation of goodwill depend on the earning capacity of a firm. Generally the question of valuation of goodwill will be arise at the time of reconstruction of partnership. In this chapter we will study the meaning of goodwill, factors affecting to its valuation and different methods for its valuation |
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