Please, help with treatment of goodwill.

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi everybody. I'm a new member and I've so far enjoyed reading questions and responses of everybody. I believe you'll be able to help me out as well.<BR>Today, we treated PARTNERSHIP ACCOUNT WITH THE TREATMENT OF GOODWILL in the partnership capital account. I didn't grasp this at all. Can anyone help me please!<BR><BR>Sindy

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  • System
    System Posts: 100,537 🤖 Admin 🤖
    Please, help with treatment of goodwill.

    Hi Sindy<BR><BR>According to FRS 10, Good will should be amortise over the period of time or that is for the indefinate period of time. If that is for certain period of time, that should be paid by new partner, it should be apportioned as according to the percentage of profit apportionment. If partner is having 10% share in partnership and the value of goodwill is 9000.00 pounds, the porportion of goodwill to be paid is 900 pound. If partner puts 1000 pounds of capital to partnership, his capital should be accounted as 100 pound capital.<BR><BR>Does it make any sense or am i lost???<BR><BR>Arjun<BR>
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Please, help with treatment of goodwill.

    <BR>Thanks Arjun. I grasp it a bit. I will also appreciate it if you could tell me how to treat the goodwill when new partner joins or leaves and its inclusion in the partnership capital account.<BR><BR>Will be expecting your reply. Thanks again.<BR><BR><BR><BR>Sindy

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