Partnership

Accountancy

Why Goodwill in balance sheet should be transferred to dr of old partner in O/R

Dhakshana Dhakshana

CFA L2

★ 18K+

12-Oct-21 12:46

491

Answers (1)

When a new partner is admitted, goodwill of the business is valued afresh. For this, the goodwill that already appears in the books of accounts is written off and is transferred to the old partner's capitals accounts in their old profit sharing ratio. The old partner's capital accounts are debited with their share of goodwill.

Sudha Reddy

CA Final

★ 20K+

12-Oct-21 14:56