Valuation of Goodwill

1. Unit 1
Prepared By
Dr. Riya Singh
Assistant Professor
Department of Commerce

2. Meaning
Circumstances
of valuation
Factors for
valuation
Methods of
Valuation

3. Goodwill is the extra value attached to the business over and above the
intrinsic value of its net assets. In other words, it is the value of
reputation or good name of the business.
MEANING

5. Goodwill is an intangible asset
 Goodwill is reputation earned by the firm.
Goodwill is a real asset but not a fictitious asset
Goodwill always exist with business but it cannot exist by itself
Goodwill is subject to fluctuations
Features of Goodwill

6. Factors Determining the Value of Goodwill
Location Factor
Time Factor
Nature of Business
Efficiency of
Management
Past profits of a
business
Stability of a business
Future prospects of a
business
Other factors

7. Location factor

8. Time factor

9. Nature of Business

10. Efficiency of Management

11. Past Profits of a business

12. Stability of a business

13. Future prospects of a business

14. Other factors

15. Circumstances of valuation of Goodwill

16. Circumstances of valuation of Goodwill

17. Circumstances of valuation of Goodwill