Annuity method under partnership.
This query is : Resolved
06 May 2010
Hello.I'm preparing for cpt june 2010 test. Under partnership chapter I unable to value the goodwill in annuity method.plz tell me the clear steps for ascertaining the value of the goodwill under annuity basis.Thank you.
06 May 2010
for calculation annuity value please follow these steps:
1) Calculate Average Profit
2) Calculate Normal Profit
3) Calculate Super Profit(Average Profit - Normal Profit)
4) Suppose, Goodwill is to be valued at 5 years' profit purchased and normal rate of return is 15% then goodwill under annuity method will be:
Goodwill = super profit * annuity value after 5 year @ 15% (search in annuity table it will be 3.3522)
you are done. Hope u understand the method.
1) Calculate Average Profit
2) Calculate Normal Profit
3) Calculate Super Profit(Average Profit - Normal Profit)
4) Suppose, Goodwill is to be valued at 5 years' profit purchased and normal rate of return is 15% then goodwill under annuity method will be:
Goodwill = super profit * annuity value after 5 year @ 15% (search in annuity table it will be 3.3522)
you are done. Hope u understand the method.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- GST on export of services and Input Credit
- TDS U/S. 194NF
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
- CASE INTIMATION OF LIABILITY UNDER SECTION 73(5)(Rule 142(1A)
- Need to correct "Whether it is last installment " response in Form 26 QB
Trending Online Classes
CAclubindia
