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Goodwill Given in the old Balance Sheet will be:
  • a)
    Written off by the old partners
  • b)
    Written off by the Sacrificing partners
  • c)
    Distributed by Gainer partners
  • d)
    Credited to old Partners Capital accounts
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Goodwill Given in the old Balance Sheet will be:a)Written off by the o...
Goodwill given in the old balance sheet will be written off by all the partners (including retiring partner) at the time of retirement of a partner. Goodwill will be written off in the old ratio of all the partners.
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Goodwill Given in the old Balance Sheet will be:a)Written off by the o...
AS-26, 'Intangible assets' prescribes that goodwill should be recorded in the books ony when consideration in money or money's worth is paid for it.Thus, in case of change in PSR among partners or admission or retirement/death of a partner, goodwill sshouldn't be raised in the books of the firm because no consideration in money or money's worth is paid for it. In case, goodwill is raised it should be immidiately written off.
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