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CBSE Class 12-commerce Answered

In ch-Goodwill valuation in que no 11sumit and Amit in this transaction (III) in the year ended 31 St March 3018 assets of the firm were not insured die to oversight . insurance premiums not paid was rs.15000. why this adjustment will be substravt
Asked by Smitakhadayate20 | 19 Apr, 2019, 05:53: PM
answered-by-expert Expert Answer
Usually, while calculating the value of goodwill, only normal business profits and losses are to be considered. All the abnormal items are therefore to be excluded. Amount of insurance premium paid in the course of business is a normal business expense and therefore, while calculating goodwill, profit will be considered after reducing all such normal  business expenses.
Answered by Surabhi Gawade | 20 Apr, 2019, 12:00: PM

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