GOODWILL- meaning, need, features, types of goodwill

1. GOODWILL- CONCEPT
& TYPES
PRESENTED BY--
DR. JYOTI KHARE
ASSOCIATE PROFESSOR
GOVT. DEGREE COLLEGE,
MALDEVTA RAIPUR DEHRADUN

2. WHAT IS GOODWILL?
• Goodwill is the value of the reputation of a firm.
• To Built over time with respect to the expected future profits over and above the normal profits.
• Any intangible attribute which contributes in the long-term to a company’s earning potential can be
described as goodwill.
• Goodwill is an intangible real asset.
• Goodwill is a form of an unidentifiable asset.
• Goodwill is an intangible asset arising in the course of purchase of one business by another business.
• It only represents the inherent value of a business that cannot be tagged anything in particular.
• To the accountant, therefore, goodwill may be said to be that element arising from the reputation,
connection, or other advantages possessed by a business which enables it to earn greater profits than
the return normally to be expected
•

3. FEATURES OF GOOWILL
• Be an intangible asset which cannot be seen; but it has some realisable value.
• Not a fictitious asset.
• It cannot be separated from the business like a physical asset can;
• Its value is not relative to any investment amounts or costs;
• This value is subjective and depends on the person (customer) judging it; and

4. ELEMENT TO ARISE OR RAISE
‘ GOODWILL’
• 1.The location of the business premises, the nature of the firm’s products or the
reputation of its service.
• 2. The possession of favourable contracts, complete or partial monopoly, etc.
• 3. The personal reputation of the promoters.
• 4. The possession of efficient and contented employees.
• 5. The possession of trade marks, patents or a well-known business name.
• 6. The continuance of advertising campaigns.
• 7. The maintenance of the quality of the firm’s product and development of the
business with changing conditions

5. FACTORS AFFECTING THE VALUE OF
GOODWILL
• (a) Locational Factor:
• (b) Time Factor: (period, years )
• (c) Nature of Business: (The nature of goods; Risk involved; Monopolistic nature of
business; Benefits of Patents and Trade-marks; and(year considerable) Easy access of raw
materials, etc.)
• (d) Capital Required: (small capital & high profit)
• (e) Trend of Profit: (the trend of profit is always rising)
• (f) Efficiency of Management:
• (g) Other Factors: (Condition of the money market, Possibility of competition, Government
policy; and, Peace and security in the country.)

6. TYPES OF GOODWILL
cat Goodwill
Cat Goodwill
Dog Goodwill
Rat Goodwill
Rabbit Goodwill

7. THANK YOU