In which of the following cases, there is need for Valuation of Goodwill in the context of partnership firm?

1. Change in the profit sharing ratio amongst the existing partners
2. Admission of new partner
3. Retirement of a partner
4. Death of a partner
5. Dissolution of a partnership firm

Choose the correct answer from the options given below.

1, 2, 3, 4

The correct answer is option 1- 1, 2, 3, 4.

There is no need to valuation of goodwill at the time of dissolution of partnership firm.

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:

1. Change in the profit sharing ratio amongst the existing partners;

2. Admission of new partner;

3. Retirement of a partner;

4. Death of a partner;

5. Dissolution of a firm involving sale of business as a going concern.

6. Amalgamation of partnership firms.