Valuation Of Goodwill:
#) Need For Valuing Goodwill: Whenever the mutual rights of the partners changes then party which makes a sacrifice must be compensated. This basis of compensation is goodwill so we need to calculate goodwill. Mutual rights change under following circumstances
+> When profit sharing ratio changes
+> On admission of a partner
+> On Retirement or death of a partner
+> When amalganation of two firms taken place.
+> When partnership firm is sold.
#) Methods Of Valuation Of Goodwill:
+> Average profit method
+> Super profit method
+> Capitalization method