while calculating relief us 37 of Indian partnership act ,1932
relief will be maximum of
1. interest @ 6%pa
2 . (post retirement profit×balance of outgoing partner )/ balance of remaining+balance of outgoing +Goodwill if not raised
I don't understand why Goodwill is here in calculation
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partnership account
Replies (1)
As partner had continued to firm since last many year so he/she must have contributed to firm in the form of money and generation of value (i.e. goodwill)
at the time of retirement he/she must be paid for capital balance and calculated goodwill amount the benefit of which will be enjoyed by continuing partners
hence good is added along with closing capital balances
Note : it is assumed that praportionate share of goodwill is also in capital balance of retiring partner
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