Can someone please explain what is to be done when a partner retires or is admitted into partnership and some amount of goodwill already appears in Balance Sheet? What shall be the accounting treatment of goodwill?
Eg- Goodwill is valued at 50000 and a Goodwill of 10000 appears in Balance Sheet
And what happens when a partner retires and at the same time a new partner is admitted in the firm, how the above treatment shall be done?
only purchased goodwill can be shown in balance sheet and the same should remained unaffected so we will deducted purchased goodwill from valued goodwill i.e. 50000-10000=40000 and distribute to partners in sacrificing ratio.
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