Question

State any three circumstances other than (i) admission of a new partner, (ii) retirement of a partner and (iii) death of a partner, when need for valuation of goodwill of a firm may raise.

Answer 1

Three circumstances that require the valuation of the goodwill of a firm are:
(i) When the company or the business is being sold off to another company or when the company is amalgamated with another company;
(ii) When the partnership is sold to some other concern ongoing concern basis;
(iii) When the profit-sharing ratio in which the partners share their profits, changes.