Valuation of Goodwill does not arise in which of the following circum…

The correct answer is Option (4) → Dissolution of partnership firm (assets sold piecemeal)

Goodwill is valued when some partners gain and others lose a share of future profits, or when the business is sold as a going concern. The book lists dissolution among these circumstances only when the business is sold as a going concern. When the firm is dissolved and its assets are sold piecemeal, the business stops and there is no goodwill to value.

Option (1) Admission of new partner — Goodwill is valued. The new partner pays the old partners for their sacrifice.

Option (2) Retirement of a Partner — Goodwill is valued. The retiring partner gets his share of goodwill.

Option (3) Death of a Partner — Goodwill is valued. The deceased partner’s share goes to his legal representatives.