In practice there are many ways to calculate goodwill.
For our lesson we are only going to look at only 2 methods .
⟴Method 1: Business Valuation Method
Goodwill = Purchase Price - Net Assets
= Purchase Price -( Total Assets - Total Liabilities)
⟴Method 2: Average(平均) annual net profit method
Goodwill = X Years' Purchases X Average annual Net Profit
HOMEWORK ----Do Practice 1 (16-3)
For our lesson we are only going to look at only 2 methods .
⟴Method 1: Business Valuation Method
Goodwill = Purchase Price - Net Assets
= Purchase Price -( Total Assets - Total Liabilities)
⟴Method 2: Average(平均) annual net profit method
Goodwill = X Years' Purchases X Average annual Net Profit
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