There is a need for valuation of goodwill under which of the following cases.

(A) Admission of new partner

(B) Retirement of a partner

(C) Dissolution of a firm involving sale of business as a going concern.

(D) Amalgamation of partnership firms

Choose the correct answer from the options given below:

(A), (B), (C) and (D)

The correct answer is option 3- (A), (B), (C) and (D).

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:

• 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.