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valuation of goodwill

07 April 2018

for calculating capital employed from asset side we take which value of asset ...there is no revalued figure of asset...in balance sheet we will deduct depriciation from aseet or we will include gross value of aseet??...plz explain in detail

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Divakar (Student CA Final ) (11857 Points)
Replied 07 April 2018

Fixed assets appeared in balance sheet after depreciation... Take that value as it is... If given revalued figures then we take that

Isha Nisha Johar (63 Points)
Replied 07 April 2018

why depreciation is deducted when it is alerady deducted from profits?

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 07 April 2018

Originally posted by : Isha Nisha Johar
	why depreciation is deducted when it is alerady deducted from profits?

DOUBLE ENTRY SYSTEM >> DOUBLE EFFECTS

ONE DEDUCT FROM PROFIT

SECOND, DEDUCT FROM FIXED ASSETS

Divakar (Student CA Final ) (11857 Points)
Replied 07 April 2018

Hey first entry is.. Depreciation A/C Dr To fixed assets A/c... Then depreciation charged to profit and loss account.... P/L A/C dr to Depreciation A/c..... This is basic.... Why u confused in that.... See accounting is double entry systems ... Every transaction has two effects .. Otherwise how accounts get tallied... Hope u understood that

Isha Nisha Johar (63 Points)
Replied 07 April 2018

then why depreciation on revalued figure is not deducted from asset for valuation of goodwill

Divakar (Student CA Final ) (11857 Points)
Replied 07 April 2018

Hey in valuation of goodwill revalued figures r considering after all adjustments... It is assuming that revalued figure is after depreciation and that is the market value.... Valuation of goodwill is not account.... That is just valuation of shares and goodwill...

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Divakar (Student CA Final ) (11857 Points)
Replied 07 April 2018

Ur query is resolved na?? That revalued figure is market price of that assets.... That revaluation done just for valuation purposes.... And that increased value not reflected in accounts