Interested to Buy Any Domain ? << Click Here >> for more details...
can u explain Good will calculation methods?
- 5 Answers
- 20760 Views
- College School Exams Tests, FactSet Systems, I also Faced
- E-Mail Answers
Answer Posted / laxman
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 |
Post New Answer View All Answers
what do u mean by arrear basic or arrear hra?
What is the rate of basic excise duty and specific duty And I want to know that how can I see that vat rate in up ,excise duty and tds details Please tell me site plese
what is the process to return sales tax file?how can i prepared s.t. file?what should be qualification for it?
WhatIs the limit of duty exemption in smal scale industries.
which name written in Tan application form Applicant is sole proprieter companies name or individual name?
Dear Sir, My qus is my co. purchase a laptop from Abc.co. for rs-37200 on credit Emi basis from hdfc bank. i paid every month 6200rs as a installment. so i want to know how i make a entry in tally 9. and also want to know i creat laptop ledger under fixed assets or office expenses. plz tel me soon.or mail me .
Reserve Capital and Reserve Capital
shares journal entries
Tell me the steps for Import and Export Thanks
What is written off?
please give the sbi bank clerk exam paper model in last five years?
How can i get GR form (GR No.) for Exports ? please give me a link of website with steps ?
How do the standards assist the users of financial report?
How can retify the errors in the trial balance
Can you explain about the distinction of Book-Keeping and Accounting
