Why premium on goodwill is charged

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1359 Points Posted on 11 March 2023
1- why premium on goodwill is charged from the incoming partner ?
2- if a partner is admitted in mid of the year does he is entitled to receive the pre admission profit ?
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On 11 March 2023 at 16:29 Report
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This discussion clarifies why an incoming partner is charged a premium on goodwill. It also addresses whether a partner admitted mid-year is entitled to profits earned before their admission, noting this depends on the partnership agreement. If the agreement doesn't specify pre-admission profit distribution, the firm may need to prepare a P&L account to determine profit allocation.

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28271 Points Posted on 12 March 2023
Yes, it is charged.
1. yes it is charged
2. if a partner is admitted in mid of the year no not pre admission profit provided agreement provides.
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On 12 March 2023 at 08:04
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1359 Points Posted on 12 March 2023
2. so if agreement doesn't provide profit for pre period then does the firm has to prepare the p&l account at the time of admission as to determine the pre and post profit?
1. i am asking what is the logic ,why it is premium on goodwill is collected/charged from incoming partner?
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On 12 March 2023 at 23:29

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