can u explain Good will calculation methods?

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can u explain Good will calculation methods?..

Goodwill is calculated by 3 method:-
1) Average profit method: In this method We calculate
goodwill as follow- Total Profit
No. of year

2)Super profit Method:- Average Profit - Normal Profit =
Super Profit and Multiply(*) No. of purchasing Year.

3) Capitalisation Method :- In this method first we find
Average Profit and multiply it Normal rate of return.

 Is This Answer Correct ? 53 Yes 10 No

can u explain Good will calculation methods?..

Goodwill be calculated By Three Methods

. Super Profit Method.

. Annuity Method

. NRR Method

 Is This Answer Correct ? 34 Yes 11 No

can u explain Good will calculation methods?..

Correct calculation of goodwill is very difficult work. But with using correct formulae of specific method , you can easily calculate goodwill . There are four methods to calculate goodwill .

Ist Method

Average profit method

In this method, we calculate previous year’s profits average and then we multiply it with number of purchase years.

2nd Method

Super profit method

In this method, we calculate normal profit with normal rate on investment. Then we calculate super profit with following formula.

Super profit = average profit / actual profit – normal profit

Goodwill = super profit X No. of purchase years

3rd Method
Capitalization method

In this method, we calculate capital employed with following formula

Capital employed = average profit or normal profit X 100/ Rate

Goodwill = capital employed – Net Assets

4th Method

Annuity Method

In this method we first of all calculate annuity . Annuity means annual value . These day , accountant are using different annuity tables for calculating annuity , after this they can easy calculate goodwill with following formula .

Goodwill = Super profit X Annuity

 Is This Answer Correct ? 9 Yes 3 No

can u explain Good will calculation methods?..

don't know

 Is This Answer Correct ? 11 Yes 8 No

can u explain Good will calculation methods?..

there types of methods
1.anntity method
2.sinking fund metho

 Is This Answer Correct ? 3 Yes 11 No

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