Login

How to calculate hidden goodwill in retirement/death questions?

calculate the adjusted capital of firm =
capital of existing partners + capital of new partner

now...
calculate the actual capital of firm =
capital of new partner × reciprocal of new partner share


now...
subtract both capitals ...
d differ. b/w them is hidden goodwill.....


hope u get it.....:-)
  • -10
View Full Answer

The amount paid to the retiring partner/deceased partner's executor in excess of the amount actually due to them is hidden goodwill.

Eg, If the amount due to a retiring partner/deceased partner's executor id Rs. 20000 and the partners decide to pay him Rs. 25000 then ,hidden goodwill = 25000 - 20000 = Rs. 5000.

  • 14
How to calculate goodwill in it

  • 0
What are you looking for?