Do we have to consider "Goodwill Purchased" in computation of Capital Employed for Calculating Goodwill.
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Goodwill
Replies (9)
Nopes.....
Yes u have to consider it
Ya because capital employed =fixed assets + working capital so according to it we have to consider it as fixed assets.
Theoretically,
If Capital Employed is being calculated for the purpose of valuation of Goodwill then it will not include Goodwill. This is because we require market value of Goodwill in capital employed & that i.s what we are calculating
However, if Capital Employed is being calculated for the purpose of valuation of Shares ( NAV ) then it will include Goodwill.
In my reference book, Goodwill is to be valued for business valuation. In Balancesheet Question- has purchased Goodwill, & it is considered in Calculating Goodwill by Super profits method.
Is it right because business is getting valued.?
The Q. has come in CA Final exams of Nov 2003 & June 2009 for 16 Marks. Can any provide link to Solution?
| Originally posted by : Roopali Kadam | ||
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Do we have to consider "Goodwill Purchased" in computation of Capital Employed for Calculating Goodwill. |
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This type of question has been asked in May CA Final 2014 exam....
No,
For d purps of valuation of G/w any goodwill(either purchased or not) shown in books is ignored while computing capital employed.
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