The important methods of valuation of goodwill are as follows:(A) Average Profits Method(B) Normal Profits Method(C) Super Profits Method(D) Capitalization MethodChoose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (C) and (D) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
The standard core methods recognized for valuing goodwill are:Average Profits MethodSuper Profits MethodCapitalization Method (which includes Capitalization of Average Profits and Capitalization of Super Profits).There is no standalone "Normal Profits Method"; normal profit is merely an intermediate component calculated inside the Super Profit and Capitalization frameworks. Hence, (A), (C), and (D) are the correct choices.