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Fr doubt.
In calculation of Capital Employed, (for the purpose of calculating Goodwill), do we include 'goodwill' in Total assets?
This goodwill is purchased goodwill, which the company is writing off each year. It is my understanding that only purchased goodwill is shown in the balance sheet. Do we, thus, consider this purchased goodwill, for calculation of capital employed.
Any enlightenment in this topic is,highly appreciated!
Replies (3)
for capital employed under asset side approach we take (all tangible trading assets less external liabilities)
under all tangible trading assets the items that to be excluded are as under:-
- goodwill (whether purchased or otherwise)
- patents, copyrights, trademarks and all other intangible assets
- investment (other than trade investment)
- losses and fictitious assets
Thank you, for the reply.
so intangibles like patents are excluded too? I've not come across any such with such particulars.
Yess. I have mentioned What all to be excluded from capital employed.other than that all to be included.
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