Why a retiring/deceased partner is entitled to a share of goodwill of the firm?

Open in App

Solution

Goodwill is an intangible asset of a firm that is earned by the efforts of all the partners of the firm. After the retirement or death of a partner, the fruits of the past performance and reputation will be shared by the remaining partners. Thus, the remaining partners should compensate the retiring or the deceased partner by entitling him/her a share of firm's goodwill.

Suggest Corrections

Similar questions

The deceased partner`s share in the firm is calculated in the same manner as in the case of a retiring partner. Is the statement true or false?

Join BYJU'S Learning Program