Valuation of business

Could you please Precise your query.

Am unable to get what exactly your query is?

Make is easy to understand so that i can try to give answer

Kindly go through the below link

https://www.caprofession.com/valuation.asp

My query is u must have read the chapter "VALUATION OF BUSINESS". In that if you need to value the business there are so  many altenatives by which you can find out the value of your business.

Historical cost basis

Economic value

Current cost basis

Earning basis.

So my question is goodwill is considered i.e. goodwill is added in historical cost of all the net assets if you need to value on historical cost basis. while it is not done in other methods why??

Hi,

Sorry to say that i am too confused now.

I will try to find out it and will try to update u , if i come to know.

Meanwhile go through the attachement i have attached here.

I read from module only, that's why I am asking , In your attachemnt file  on Page no. 9.75 see under the historical cost valuation that goodwill is asked to add . in the chapter valuation of business.

and I have posted some other query also in the topic share based payments, do you want to hear that??

Yeah with pleasure.

Do share that topic here.

while recognizing expenses for the share based payments, when there is a change in Fair value then why the decrease is ignored and in the case of increase too only the incremental part is considered and not the revised fair value . I mean what's the logic behind that.  

for eq. if the fair value considered earlier was 15 for recognition of expenses , and after that there is a reduction in exercise price ie. originally FV before reduction is 14 and after reduction it is 17  then we have to consider 15+3 ie. 18 as a FV to recognize. not the 17 why???

 

Agreed that in historical cost value of goodwill is ascertained and added to such historical cost of assets.

You say that the same goodwill is not added in net assets in any other methods.

But in Current Cost Valuation Goodwill is added under intangible assets.

The logic behind that is - COST OR MARKET VALUE WHICHEVER IS HIGER has to be considered.

yes, Now you understood  what i mean to say. Can you justify it now.

Justified na.

U say that the goodwill is not added in net assets in any other methods,

but goodwill is added in Current Cost Valuation Method under the head Intangible Assets.

What else is your query?

are you sure that higher value is considered that is the reason or it is just a guess. 

Its not a guess, but the logic must be cost or market value whichever is higher should be taken into consideration.