Question 1 Introduction
Goodwill is a tangible non-current asset.
Goodwill is a tangible non-current asset.
The formal definition of goodwill is 'the difference between the value of a business as a whole, and the net value of its separate assets and liabilities'.
When goodwill is created on a change in the partnership, the partners' capital accounts are debited in the old profit or loss sharing ratio.
On retirement of a partner, assets of the partnership are often revalued.
When an asset is revalued upwards, the asset account is debited with the amount of the increase.
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