This document discusses the concept of goodwill and its types. It defines goodwill as the value of a firm's reputation that is built over time through expected future profits above normal profits. Goodwill is an intangible asset arising from attributes like location, contracts, trademarks, and employee satisfaction that contribute to long-term earnings. The value of goodwill depends on factors such as industry, profit trends, management efficiency, and government policy. There are different types of goodwill including commercial, professional, and personal 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