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valuation of goodwill
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
Replies (9)
Fixed assets appeared in balance sheet after depreciation... Take that value as it is... If given revalued figures then we take that
why depreciation is deducted when it is alerady deducted from profits?
| Originally posted by : Isha Nisha Johar | ||
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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
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
then why depreciation on revalued figure is not deducted from asset for valuation of goodwill
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...
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
revalued figures are considered as on the date valuation of goodwill.
so no question of depreciation on revalued numbers.
After depreciation
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