Goodwill normally arises :

When a partnership admits a new partner, two important things are considered:

• Profit adjustment whether in terms of existing and future profits and

• Goodwill

Also, besides new partner(s) being admitted, the death or retirement of an old partner also needs the computation or valuation of goodwill of the partnership.

Simple Definitions of Goodwill:

• “ as the cost of acquisition less the aggregate fair value of the purchased assets and liabilities”

• In simple everyday terms, the advantage a business has in its connection with its customers. Why is this so? The goodwill of a business may be due to the following:

• Location of the business
• Nature and reputation of its products and services
• Its trademarks, patents and / logo
• Professional high quality skillful management and or labor
• Having advantage like difficult entry into the industry or freedom from legislative restrictions ( casino,etc)
• Possession of partial or complete monopoly.