Goodwill depends on many factors like:
- the nature/type of the business,
- the type of customer which such a business is inherently likely to attract,
- the expenditure already made in advertisements & promotions establishing the business,
- the reputation existing and
- the probabilities of the market.
[As described earlier, goodwill consists of the advantages a business has in connection with its customers, employees and outside parties with whom it has contact.]
The method to be adopted in valuing goodwill will depend upon the circumstances of each case.Append below are the various methods of Valuing Goodwill:
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