Valuation of Goodwill Complete Chapter | CA Foundation Accounts | Treatment of Goodwill | ICAI Exams

At 0:00 the video opens with a brief introduction. At 0:07 the presenter begins explaining the methods of computing goodwill, starting with the average profit method at 0:33, followed by the super profit method at 13:47, and the capitalization method at 40:45. An examination question is discussed at 1:03:29, and the weightage average method of goodwill is covered at 1:09:47. The video then defines goodwill as the monetary value of a firm’s reputation and the expected future profits above normal profits, noting that it exists only when a firm earns super profits. It explains that goodwill is an intangible real asset that can be bought and sold. Factors affecting the value of goodwill include the nature of the business, the quality of its products, and the stability of demand for its offerings.