Yaar, these goodwill problems in our CA final practice are like my shop's accounts – same numbers, three ways to count. For average profit, you just take the normal profits of past years and multiply by agreed years. Super profit is when the firm earns more than the normal rate of return, you capitalise that extra amount. Capitalisation method? You capitalise the average profit itself and compare it with the capital employed.
But listen, sitting here with these khata books, I see goodwill isn't in the calculation. Real goodwill is old Sardarji buying just a single toffee every evening, but sending his whole wedding party to my shop for supplies.
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