Скачать или смотреть Valuation of Goodwill [Average Profit ,Super profit and Capitalisation Method]

In This Video We Will Discuss Valuation of Goodwill Complete Chapter All Concepts, Problems and Examples.

In this video:-
valuation of goodwill,
methods of valuation of goodwill,
valuation of goodwill in hindi,
meaning of goodwill,
problems and solutions on valuation of goodwill,
features of goodwill,
computation of goodwill,

Meaning of Goodwill
Goodwill is the value of the reputation of a firm built over time with respect to the expected future profits over and above the normal profits. A well-established firm earns a good name in the market, builds trust with the customers and also has more business connections as compared to a newly set up business. Thus, the monetary value of this advantage that a buyer is ready to pay is termed as Goodwill.

The buyer who pays expects that he will be able to earn super profits as compared to the profits earned by the other firms. Thus, it can be said that goodwill exists only in case of firms making super profits and not in case of firms earning normal profits or losses. It is an intangible real asset which cannot be seen or felt but exists in reality and can be bought and sold.

Factors Affecting the Value of Goodwill
Nature of business: A firm that deals with good quality products or has stable demand for its product is able to earn more profits and therefore has more value.

Location of business: A business which is located in the main market or at a place where there is more customer traffic tends to earn more profit and also more goodwill.

Owner’s reputation: An owner, who has a good personal reputation in the market, is honest and trustworthy attracts more customers to the business and makes more profits and also goodwill.

Efficient management: An organization with efficient management has high productivity and cost efficiency. This gives it increased profits and also high goodwill.

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