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Why is the value of goodwill …

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Why is the value of goodwill determined when a firm is reconstituted

Posted by Yash Bhargava 6 years, 6 months ago

CBSE > Class 12 > Accountancy

2 answers

Jai Srivastava 6 years, 6 months ago

Reconstitution of firm results in sacrifice of PSR of some partners and gain in PSR by others, this is due to sale of PSR bt former to later. So Present value of goodwill s calculated, which forms the basis for calculation of amount of compensation by gaining partner yo sacrificing partner.

Samyak Surana 6 years, 6 months ago

Becoz when a firm is reconst. Then thr os a chng in proft shrng ratio so the gaining partnr have to pay the amt of goodwill to th firm

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