Valuation of goodwill.

This query is : Resolved

vivek singh (Querist)
Follow

28 May 2015 Valuation of goodwill.

my query is-

why dividend paid/distributed is added to terminal/closing capital employed to calculate average capital employed. there was a particular sum where closing CE is calculated first and then 100% dividend paid is added and 1/2 of current year profits is deducted to calculate average CE.
please also help me by providing notes of valuation chapter as i have lots of confusion wrt. capital employed and future maintainable profits.
thank you..

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)
Follow

28 May 2015 Capital employed is taken as average capital employed which can be computed as opening capital employed plus half of current year's profit or closing capital employed less half of current year's profit. As dividend is paid out of current year's profit it is added back so that the full year's profit gets included in the closing capital employed and then half of current year's profit is deducted.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Adesh Mahajan

Sharad Jain

CMA Sajin Odupara

vinal

sunjeev batra

Subscribe Now

Valuation of goodwill.

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Senior Executive

Accountant

CA Final