Effect of Proposed Dividend in valuation of Goodwill

In valuation of goodwill,
Proposed dividend to equity & preference shares is to be deducted from assets or not ?
Replies (3)
Quick Summary
This discussion explores whether proposed dividends should be deducted when valuing goodwill. While pre-acquisition dividends are typically adjusted against the cost of investment, the consensus leans towards not deducting proposed dividends from assets when calculating goodwill. However, a nuance arises with preference shares, where deducting the preference share capital might necessitate deducting the associated preference dividend.

Pre acquisition dividend is deducted from the Cost of Investment to calculate Goodwill or capital reserve.....Proposed dividend need not be made for any kind of adjustment in calculating goodwill....
Thanks for reply, but I think you have given answer from consolidation point of view and I have confusion from valuation point of view, i.e. valuation of Goodwill...
Dividend declared is not to be treated as an outside liability(I mean it is liability towards owners/shareholders).., so it need not be deducted in calculating goodwill...,However., if you are deducting Preference share capital., you need to deduct preference dividend also...

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