Topic 2

1. SUBMITTED
BY
SMITHA R.S
B.Ed COMERCE
N.S.S TRAINING COLLEGE
PANDALAM
9/21/2014 1

2. MEANING
Good Will is value of the reputation of firm
in respect of profits n further over and above
the normal profits .

3. DEFINITION
Good Will can be defined as the
present value of a firms anticipated
excess earnings.

4. Factors affecting the value of
goodwill
1. Location
2. Nature of business
3. Effectng of management
4. Time factor
5. Market Situation
6. Special advantages

5. Need for valuation of Goodwill
1. Change in the profit sharing ratio of existing partners
2. Admission of a partner
3. Retirement of a partner
4. Death of a Partner
5. Dissolution of a firm or sale of partnership
business .
6. Amalgamation of firms

6. Methods of valuation of
Goodwill
1. Average profit method
2. Weighted average profit method
3. Super profit method
4. Capitalization method
5. Present value of super profits .