Goodwill can be valued in partnership when?

  • A a partners make profits
  • B large losses are made
  • C a partner retires
  • D a new branch is opened

The correct answer is C. a partner retires

When a partner retires, the partnership may need to revalue its assets and liabilities to reflect their current market values.

This includes goodwill, which represents the value of the business’s reputation, customer relationships, and other intangible assets that aren’t separately identified.

The retiring partner may be entitled to a share of this goodwill, so it needs to be valued as part of the settlement of the partner’s interest in the partnership.

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