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                  BRILLIANT’S    Long Term Financing and Valuation of Goodwill & Shares             215


                      3. Rat Goodwill: The characteristics of a   3. a¡Q> JwS>{db: EH$ a¡Q> H$s {deofVm h¡ {H$ ¶h
                  rat is that it moves from place to place, hence if  ñWmZ-ñWmZ na Ky‘Vm ahVm h¡, AV… ¶{X ì¶mnma H$s
                  the Goodwill of a business often  changes, it is
                                                              JwS>{db ~XbVr h¡ Vmo Bgo a¡Q> JwS>{db H$hm OmVm h¡& ¶h
                  known as Rat Goodwill, such Goodwill is val-
                  ueless.                                     JwS>{db ‘yë¶hrZ h¡&

                  Types of Goodwill                           JwS>{db Ho$ àH$ma
                      Goodwill is generally of two types:         JwS>{db gm‘mݶV… Xmo àH$ma H$s hmoVr h¡…
                      (a) Purchased Goodwill; and                  (a) nM}ñS> JwS>{db; VWm
                      (b) Self-generated or Inherent Goodwill.     (b) goë’$ OZaoQ>oS> ¶m BZhoa|Q> JwS>{db&
                      1. Purchased Goodwill:  Purchased Good-     1. nM}ñS> JwS>{db… nM}ñS> JwS>{db CËnÝZ hmoVr h¡
                  will arises  when one  business  buys  another  O~ EH$ ì¶mnma Xÿgao H$mo IarXVm h¡ VWm ^wJVmZ {H$¶m
                  and the purchase consideration paid is more  J¶m nM}g H§${gS>aoeZ àmá {H$¶o J¶o Hw$b Q>|{O~b AgoQ²>g
                  than the  value of  the net  tangible assets  re-
                  ceived. It can never exist in a new business ex-  Ho$ ‘yë¶ go A{YH$ hmoVm h¡& ¶h nM}g Ho$ A{V[a³V Z¶o
                  cept by purchase.                           ì¶mnma ‘| H$^r {dÚ‘mZ Zht hmo gH$Vm h¡&
                      Following are the features of purchased     nM}ñS> JwS>{db H$s {deofVmE§ {ZåZ h¢…
                  goodwill:
                    It arises on acquisition.                   ¶h EH$ E{³d{OeZ na CËnÝZ hmoVr h¡&
                    It is demonstrated by a purchase transac-   ¶h EH$ nM}g Q´>m§Oo³eZ Ûmam n«X{e©V H$s OmVr h¡&
                      tion.
                    It is recognized in financial statements.   ¶h ’$m¶Z|{e¶b ñQ>oQ>‘|Q²>g ‘| nhMmZr OmVr h¡&
                    Price paid for goodwill depends upon the    JwS>{db Ho$ {bE ^wJVmZ {H$¶m J¶m ‘yë¶ ^{dî¶ Ho$
                      purchaser's expectation of future profits.  bm^ H$s nM}g H$s Anojm na {Z^©a H$aVm h¡&
                      2. Self-generated or Inherent Goodwill:     2. goë’$ OZaoQ>oS> ¶m BZhoa|Q> JwS>{db… Zm°Z nM}ñS>
                  Self-generated or inherent goodwill is referred  ¶m BZhoa|Q> JwS>{db Am§V[aH$ ê$n go àXmZ H$s J¶r JwS>{db
                  to as internally generated goodwill and arises
                  when a business may over the years generate  H$m g§X^© XoVr h¡ VWm ¶h CËnÝZ hmoVr h¡ O~ EH$ ì¶mnma
                  its own goodwill.                           H$B© dfm] Ho$ níMmV² ñd¶§ H$s JwS>{db CËnÝZ H$a gH$Vm h¡&
                      Following are the  features of self-gener-  Zm°Z-nM}ñS> JwS>{db H$s {deofVmE§ {ZåZ h¢…
                  ated goodwill:
                    It  is internally  generated. Valuation  de-   ¶h Am§V[aH$ ê$n go CËnÝZ hmoVr h¡& ‘yë¶m§H$Z ‘yë¶
                      pends  on  subjective  judgment  of  the    Ho$ {df¶mË‘H$ AZw‘mZ na {Z^©a H$aVm h¡&
                      valuer.
                    A cost cannot be placed on these types of   JwS>{db Ho$ Bg àH$ma na bmJV Zht bJm¶r Om
                      goodwill.                                   gH$Vr h¡&
                    It  is  not  demonstrated  by  a  purchase   ¶h EH$ nM}g H§${gS>aoeZ Ûmam àX{e©V Zht H$s OmVr
                      consideration.                              h¡&

                    It is not recognized in financial statement.   ¶h ’$m¶Z|{e¶b ñQ>oQ>‘|Q> ‘| nhMmZr Zht OmVr h¡&
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