In accounting terms, hidden goodwill is that extra value of the firm not in the books, calculated when a new partner’s capital contribution implies a higher total firm value. You see, when he brings only capital, we back-calculate the goodwill he *should have* paid for his share. I know this because when my cousin joined our family’s hardware shop, his investment made us realise our own ‘chupa hua daam’—the loyal customers and that corner location were worth more than our ledger showed.
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