In this session, we will learn about the accounting treatment of goodwill when a partner retires and the gaining partner compensates the retiring partner in the gaining ratio. Since in future profits will arise because of the present goodwill. The retiring or the deceased partner will not be sharing future profits. Therefore all continuing partners pay to retire partners the share of Goodwill in gaining ratio. It is fair to compensate the retiring or deceased partner for the same. Watch the video till the end to know the answers to the below-mentioned questions…
