Admission of a partner

We have calculate the goodwill of the firm with the average profit made by it. Here in the previous year's profit/loss there are some abnormal expense and income. So just remove those abnormal expense and income and calculate the goodwill as usual.

Vijay K

CA Inter

★ 9K+

07-Oct-21 22:15

But generally we have to consider and account for all abnormal losses and ignore all abnormal gains right?

Thread Starter

Soumya A

CA Inter

★ 20K+

07-Oct-21 22:43

Yes sis, to attain the profit or loss of the company we have to do like this. But some really if you think, some losses (abnormal loss) are not occuring in every year. And moreover the goodwill is the like a good image of the company in the society. For that we can only give them the normal loss or normal profit. That's why we have remove those abnormal let as while calculating goodwill.

Vijay K

CA Inter

★ 9K+

08-Oct-21 07:16

Just to add, abnormal will not occur every year. So why would someone pay for it.

CA Suraj Lakhotia

Admin

08-Oct-21 15:53

Thank you bro Thank you sir

Thread Starter

Soumya A

CA Inter

★ 20K+

08-Oct-21 16:01