Rahul Kumar Das
,
Abstract

It is generally observed that a company, which has been in existence for a number of years, is in a position to earn a higher amount of profits year after year in comparison to a new company in spite of all other things such as location, investment, quality of goods etc. remaining the same. This is because over a period of time a firm establishes its reputation on account of which not only the old customers continue to patronize the firm but they also bring new customers. This results in enabling an old established company to earn excess profits as compared to a new company. This excess profit is termed as “Goodwill”. Goodwill has, therefore, been defined as “The present value of firm’s anticipated excess earnings”. The term “excess earning” is an indicator of this fact that goodwill is there when a business is earning over and above the normal earnings made by other similar firms in the same business or industry.The present paper is designed to understand the concept of “Goodwill” and different methods of valuing goodwill.

KEYWORDS: Goodwill, profits, judgement, intangible in nature, valuer.

Keywords:
Journal Name :
EPRA International Journal of Economic and Business Review(JEBR)

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Vol : 7
Issue : 8
Month : August
Year : 2019
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