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Goodwill

Accountancy

While I'm calculating super profit what is the Avg profit is Less then the normal rate of returns??Avg profit is 80k but normal rate of Returns is 1Lak in such cases what is Good will??

Dhakshana Dhakshana

CFA L2

★ 18K+

06-Oct-21 11:20

656

Answers (5)

Best Answer

Bri, it is like this. We can use super profit basis of goodwill calculation one and only if the actual profit made by us in an accounting period is more than that of normal profit made by a similar company. So in a situation like this, we can't use super profit basis.

Vijay K

CA Inter

★ 9K+

06-Oct-21 15:28

Bro, can you upload the question pls. Because we need actual profit made in the year not the average profit. According to super profit basis, Goodwill = actual profit - normal profit, Where normal profit = NRR x capital employed.

Vijay K

CA Inter

★ 9K+

06-Oct-21 12:54

question upload bro

Balachandar S

CA Inter

★ 59K+

06-Oct-21 12:59

Vijay K

Bro, can you upload the question pls. Because we need actual profit made in the year not the average profit. According to super profit basis, Goodwill = actual profit - normal profit, Where normal profit = NRR x capital employed.

It's my Assumption bro I didn't have the qus

Thread Starter

Dhakshana Dhakshana

CFA L2

★ 18K+

06-Oct-21 14:57

Vijay K

Bri, it is like this. We can use super profit basis of goodwill calculation one and only if the actual profit made by us in an accounting period is more than that of normal profit made by a similar company. So in a situation like this, we can't use super profit basis.

Yes bro I understand thank you

Thread Starter

Dhakshana Dhakshana

CFA L2

★ 18K+

06-Oct-21 19:40

Goodwill

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