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Why a retiring/deceased partner is entitled to a share of goodwill of the firm. |
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Answer» The retiring or deceased partner is entitled to his share of goodwill at the time of retirement” death because the goodwill has been earned by the firm with the efforts of all the existing partners. Hence, at the time of retirement/death of a partner, goodwill is valued as per agreement among the partners the retiring/deceased partner compensated for his share of goodwill by the continuing partners (who have gained due to acquisition of share of profit from the retiring/deceased partner) in their gaining ratio. |
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