Practicing Success
Valuation of Goodwill does not arise in which of the following circumstances: |
Admission of new partner Retirement of a Partner Death of a Partner Dissolution of Partnership firm |
Dissolution of Partnership firm |
The correct answer is Option (4) - Dissolution of Partnership firm. Goodwill is an intangible asset that represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. Normally, the need for valuation of goodwill arises at the time of sale of a business. But, in the context of a partnership firm it may also arise in the following circumstances: * At the time of dissolution of firm,goodwill is not valued as books are closing in case of dissolution of firm. |