banner_ad

Goodwill realeted

This query is : Resolved 
Profile Image

Profile Image

(Querist)
02 May 2025 Understanding of goodwill, I want to ask if partnership firm readjust share ratio.
Suppose firm average Net profit 12 lakh after partner's interest on capital ( 10 lakh).
So, question is that in goodwill calculation
Average Profit X year purchase ( 3 years)
ie 12 lakh x 3 year = 36 Lakh
Or
(Average profit + partners interest on capital) X year purchase
ie ( 12 lakh + 10 lakh) X 3 year = 66 lakh
Which method is correct.
Please solve the query.

Profile Image

Aashok Kumar Sharma online

Profile Image

Aashok Kumar Sharma online (Expert)
12 August 2025 You should NOT add back interest on capital if the profit given is already after interest on capital.
Doing so will double count the interest, leading to an overstatement of goodwill.

✔️ Conclusion:
The correct goodwill calculation = ₹12L × 3 = ₹36L
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
ARTICLESHIP 17 May 2026
CA Article /Trainee

Malik Sunil & co

New Delhi

CA Foundation

View Details
Company
19 May 2026
Article, CA & Paid Assistant Positions

Aggarwal Sarawagi and Co

New Delhi

CA

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
ARTICLESHIP 23 May 2026
Article Assistants

Acupro Consulting

Gurgaon

CA Inter

View Details
Company
29 May 2026
Company Secretary - Part time

Shaswat initial support private limited

Ahmedabad

CS

View Details
Company
26 May 2026
Senior Accountant cum purchase Manager

Vardhaman Group of India

Pimpri Chinchwad

CA Inter

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details