Which of the below-mentioned methods are considered while valuing goodwill?(A) Average Profits Method(B) Super Profits Method(C) Piecemeal Distribution Method(D) Capitalization MethodChoose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(A), (C) and (D) only
Solution & Step-by-step Explanation
Valuation of goodwill is done through specific recognized methods:Average Profits Method (Simple or Weighted)Super Profits MethodCapitalization Method (Capitalization of Average Profit or Capitalization of Super Profit)Piecemeal Distribution Method is an accounting technique used during the dissolution of a partnership firm to distribute cash systematically to stakeholders as assets are progressively realized. It has nothing to do with goodwill valuation.