Goodwill

Accountancy

What's the logic behind deducting remuneration of partners from Average profit while calculating Goodwill ? Does it mean that those remuneration will be (a)payable in future? (or) (b)It had been paid in past? If the latter(b) is the answer, how its correct? (as we already deducted the remuration for those respective years and then only display the profits in the question as previous year profits)

Naresh Sundar

CA Inter

★ 2K+

15-Nov-22 16:24

730

Answers (1)

Best Answer

It means remuneration is due(yet to pay) . So , we are deducting from average profit to show only the profit value after all dues and payables

Shankari C

CA Inter

★ 12K+

15-Nov-22 17:59

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