While calculating goodwill, if capital expenditure has been treated as revenue expenditure, then why do we add that amount to the profit of that year only in which that expenditure had incurred?? Why not to that of other years, coz that wrong account's balance must have been b/d in the next year, affecting it's net profit?? Kindly give a nice explanation for this in simple words.

Dear Student, while calculating the normal profit of the needed year, we only make adjustments to that particular year. Therefore, when capital expenditure has been treated as revenue expenditure, we add that amount of expenditure to the profit of that year only in which that expenditure had incurred as we are required to calculate normal business profit of that year. You need not to bother about others years as the same are rules of calculating goodwill. At higher academic level you will learn what changes need to be made in future years. If you still have doubts kindly post the image of particular query so that we can revert back to you with best possible solution. Regards