Treatment of goodwill
This query is : Resolved
25 September 2012
A Pvt. Ltd. Co. purchased a partnership firm paying Rs.10 Lacs. On the date of Purchase the Partnership firm is having an assets of Rs.198868.56 & a liability of Rs.12000.
Now i want to know what should be the accounting treatment of Goodwill in the books of Pvt. Ltd. Co.
Please help me..
Now i want to know what should be the accounting treatment of Goodwill in the books of Pvt. Ltd. Co.
Please help me..
25 September 2012
If you are following net asset method then the goodwill will be accounted around Rs. 813131.44 ((1000000 - (198868.56-12000))
whixh you should account it as asset in pvt co. as you have purchased the business of firm by paying more than what the net assets were.
whixh you should account it as asset in pvt co. as you have purchased the business of firm by paying more than what the net assets were.
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