Which of the following is NOT a valid method for the valuation of goodwill?
- AAverage profit method
- BSuper profits method
- CCapitalisation method
- DAverage super profit capitalization method
Solution & Step-by-step Explanation
In accounting frameworks for partnerships, the standard techniques approved for computing intangible goodwill values are:Average Profit Method: Computed based on simple or weighted historical operating trends.Super Profit Method: Focuses on profits generated in excess of normal expected market yields.Capitalisation Method: Applied by continuous discounting either via Capitalisation of Average Profits or Capitalisation of Super Profits.There is no recognized technique known as the "Average super profit capitalization method". It is an arbitrary combination of terms.