Evaluating Goodwill of a Business: 4 Methods | Accounting

The following are the methods of evaluating goodwill:- 1. Average Profit Method  2. Super Profit Method  3. Capitalisation Method  4. Annuity Method. Method # 1. Average Profit Method: Under this method goodwill is valued on the basis of an agreed number of years' purchase of the average maintainable profits. The maintainable profit indicates the adjusted profit. To get the adjusted [...]