Good will definition Essay Example for Free

Good will definition Essay An account that can be found in the assets portion of a companys balance sheet. Goodwill can often arise when one company is purchased by another company. In an acquisition, the amount paid for the company over book value usually accounts for the target firms intangible assets. Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset like buildings or equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology. Method: There are three methods of valuation of goodwill of the firm; 1. Average Profits Method 2. Super Profits Method 3. Capitalisation Method 1. Average Profits Method: This method of goodwill valuation takes the average profit of previous years as its basis. This average profit is multiplied by the number of purchases made in that year. Goodwill = Average Profit x Number of Purchases in the year Before calculating the average profits the following adjustments should be made in the profits of the firm: a. Any abnormal profits should be deducted from the net profits of that year. b. Any abnormal loss should be added back to the net profits of that year. c. Non-operating incomes eg. Income from investments etc should be deducted from the net profits of that year. Example: An Ltd agreed to buy the business of B Ltd. For that purpose Goodwill is to be valued at three years purchase of Average Profits of last five years. The profits of B Ltd. for the last five years are: Year| Profit/Loss ($)| 2005 | 10,000,000| 2006| 12,250,000| 2007| 7,450,000| 2008| 2,450,000 (Loss)| 2009| 12,400,000| Following additional information is available: 1. In the year 2008 the company suffered a loss of $1,000,500 due to fire in the factory. 2. In the year 2009 the company earned an income from investments outside the business $ 4,500,250. Solution: Total profits earned in the past five years= 10,000,000 + 12,250,000 + 7,450,000 2,450,000 + 12,400,000 = $ 39,650,000 Total Profits after adjustments = $ 39,650,000 + $ 1,000,500 $ 4,500,250=$ 36,150,250 Average Profits= $ 36,150,250à ·5=$ 7,230,050 Goodwill = $ 7,230,050Ãâ€"3=$ 21,690,150 Thus A Ltd would pay $ 21,690,150 as the price of Goodwill earned by B Ltd. 2. Super profits method: Super profit refers to a situation where in the actual profit is higher than what is expected. Under this method, Goodwill = super profit x number of years’ purchase Steps for calculating Goodwill under this method are given below: i) Normal Profits = Capital Invested X Normal rate of return/100 ii) Super Profits = Actual Profits Normal Profits iii) Goodwill = Super Profits x No. of years purchased For example, the capital employed as shown by the books of ABC Ltd is $ 50,000,000. And the normal rate of return is 10 %. Goodwill is to be calculated on the basis of 3 years purchase of super profits of the last four years. Profits for the last four years are: Year| Profit/Loss ($)| 2005 | 10,000,000| 2006| 12,250,000| 2007| 7,450,000| 2008| 5,400,000| Total profits for the last four years = 10,000,000 + 12,250,000 + 7,450,000 + 5,400,000 = $35,100,000 Average Profits = 35,100,000 / 4 = $ 8,775,000 Normal Profits = 50,000,000 X 10/100 = $ 5,000,000 Super Profits = Average/ Actual Profits − Normal Profits = 8,775,000 − 5,000,000 = $ 3,775,000 Goodwill = 3,775,000 Ãâ€" 3 = $ 11,325,000 3. Capitalisation Method: There are two ways of calculating Goodwill under this method: (i) Capitalisation of Average Profits Method (ii) Capitalisation of Super Profits Method (i) Capitalisation of Average Profits Method: As per this method, Goodwill = Capitalized Value the firm Net Assets Capitalized Value of the firm = Average Profit x 100/ Normal Rate of Return Net Assets = Total Assets External Liabilities For example a firm earns $40,000 as its average profits. The normal rate of rteturn is 10%. Total assets of the firm are $1,000,000 and its total external liabilities are $ 500,000. To calculate the amount of goodwill: Total capitalized value of the firm = 40,000 Ãâ€" 100/10 = 400,000 Capital Employed = 1,000,000 − 500,000 = 500,000 Goodwill = 500,000 − 400,000 = 100,000 (ii)Capitalisation of Super Profits: Under this method, goodwill is calculated as: Goodwill = Super Profit x 100/Normal Rate of Return For example ABC Ltd earns a profit of $ 50,000 by employing a capital of $ 200,000, The normal rate of return of a firm is 20%. To calculate Goodwill: Normal Profits = 200,000 Ãâ€" 20/100 =$ 40,000 Super profits = 50,000 − 40,000 = $10,000 Goodwill = 10,000 Ãâ€" 100 / 20 = $50,000 Partial Goodwill Method In the partial goodwill method, goodwill is calculated as the difference between the purchase consideration paid and the acquirers share of the fair value of the net identifiable assets. In partial goodwill method, only the acquirers share of the goodwill is recognized. Goodwill under full goodwill method exceeds goodwill under partial goodwill method by the non-controlling interest share of the goodwill. Partial goodwill method is not allowed under US GAAP but it is allowed as an option under IFRS (besides the full goodwill method). Goodwill under partial goodwill method differs from goodwill under full goodwill method only in situations in which investment by the acquirer is less than 100%. Example Lets follow the same example that we discussed in full goodwill method. Company A acquired 75% shareholding in Company B for $20 million. Book value of net identifiable assets of Company B is $14 million. The fair value of Company Bs asset is the same as their book value except accounts receivables which are impaired by $1 million. Book value of assets is $54 million while book value of liabilities is $40 million. The purchase consideration is the cash paid to acquire 75% ownership and it equals $20 million. Fair value of net identifiable assets is $13 million ($54 million book value minus $1 million on account if impairment in accounts receivable minus liabilities of $40 million). The acquirers share of the net identifiable assets equals 75% of $13 million which equals $9.75 million. Goodwill is hence $20 million minus $9.75 which equals $10.25 million. Company A will pass the following journal entry to record the business combination. Goodwill| $10.25 M| | Assets| $53 M| | Liabilities| | $40 M| Cash| | $20 M| Non-Controlling Interest| | $3.25 M| Non-controlling interest is calculated as 25% of fair value of net identifiable assets. It equals $3.25 ($13 million multiplied by 0.25). It can also be arrived at the balancing figure: (goodwill under full goodwill method + assets acquired − liabilities assumed − cash paid). Total goodwill under full goodwill method was $13.67 and non-controlling interest was $6.67 million. The difference is non-controlling interest in case of partial goodwill is only because in partial goodwill method the non-controlling interest share of goodwill is not recorded which equals $3.42 million (0.25 of ($26.67 minus $13 million)). Weighted average profit method This method of goodwill evaluation can be explained as a modified side of the he average profit method. This method involves the relevant number of weights, i.e. 1, 2, 3, 4 multiples profit of each year so as to find out value product. The total of products is thereafter divided by the total of weights so as to calculate the weighted average profits. Goodwill = Weighted Average Profits x No. of years Purchase Weighted Average Profit = Total of Products of Profits/ Total of Weights EXAMPLE The profit of X Ltd. for the last five years and the corresponding weights are as follows. Calculate the value of goodwill on the basis of 3 years’ purchase of the weighted average profit. Solution: Weighted Average Profit = Rs. 21, 30,000 à · 15 = Rs. 1, 42,000. Value of Goodwill = 3 years’ purchase of weighted average profit: Rs. 1, 42,000 x 3 = Rs. 4, 26,000

The Death of Ivan Ilyich Essay -- Literary Analysis, Tolstoy

In his novella, The Death of Ivan Ilyich, Leo Tolstoy satirizes the isolation and materialism of Russian society and suggests that its desensitized existence overlooks the true meaning of life—compassion. Ivan had attained everything that society deemed important in life: a high social position, a powerful job, and money. Marriage developed out of necessity rather than love: â€Å"He only required of it those conveniences—dinner at home, housewife, and bed—which it could give him† (17). Later, he purchased a magnificent house, as society dictated, and attempted to fill it with ostentatious antiquities solely available to the wealthy. However, â€Å"In reality it was just what is usually seen in the houses of people of moderate means who want to appear rich, and therefore succeed only in resembling others like themselves† (22). Through intense characterizations by the detached and omniscient narrator, Tolstoy reveals the flaws of this deeply superfic ial society. Although Ivan has flourished under the standards of society, he fails to establish any sort of connection with another human being on this earth. Tragically, only his fatal illness can allow him to confront his own death and reevaluate his life. He finally understands, in his final breath, that â€Å"All you have lived for and still live for is falsehood and deception, hiding life and death from you† (69). Tolstoy establishes his satire instantly after the death of Ivan through the cruel and selfish reactions of his friends. The death of a friend would normally conjure feelings of grief and compassion, yet for Ivan’s close associates, thoughts of their futures drowned out any thoughts of death. â€Å"So on receiving the news of Ivan Ilych's death the first thought of each of the gentlemen in ... ...nt factors in an individual’s life. Tolstoy suggests that even though most of Russian society has lived similar to Ivan, an opportunity will always exist to redeem oneself of his past greed. Leo Tolstoy argues in The Death of Ivan Ilyich the importance of compassion in life and the pivotal role it plays in allowing an individual to live a truly satisfying life. In his eyes, the Russian nobility did not actually live since their sole priorities were themselves and obtaining possessions. While the poor, on the other hand, understood the importance of their time on this earth and seized every second of it. Although written in the late nineteenth century, Tolstoy’s work continues to apply to American society even today. People continue to isolate themselves from the world and suppress all difficult emotions, believing that their wealth-oriented lives are noble.

Optimizing Physical Properties of Municipal Waste Sites

OPTIMIZING PHYSICAL PROPERTIES OF MUNICIPAL WASTE SITES TO SUITAS A CONSTRUCTION SITE Abstraction Waste is universally generated by homo from their assorted activities. Besides sum of waste coevals is increasing really quickly. Open dumping of municipal solid waste is common pattern in srilanka. Bloemendal waste pace was taken as instance survey of this research. Bloemendhal shit waste is silty sand type and such dirt can be treated with traditional calcium hydroxide and cement stabilizes methods. The end of this research was to better shit waste to upgrade its strength and public presentation of the dirt. The selected stabilizes were lime and cement. Key findings of the research are, ( 1 ) Strength of treated dirt additions with clip, ( 2 ) Strength fluctuation with cement and calcium hydroxide content, ( 3 ) Strength Variation with wet content, ( 4 ) Applicability of cement and calcium hydroxide as a stabilizer, ( 5 ) strength fluctuation with Water/amendment ratio. Introduction Waste We can be merely explicate as any stuffs that is discarded by worlds after its intent is obtained.Waste is increase twenty-four hours by twenty-four hours due to the all human activities in all over the universe. This sort of Waste we can split in to three classs. They are Solid, liquid and gaseous. In developing states Open Dumpsites are common, due to the low budget for waste disposal. Open dumping of municipal solid waste is common patterns in Sri Lanka. By pattern dumping of waste at land fill sites is done. But this can do by negative facets people populating in the vicinity. The chemicals used in waste can be carried by H2O and affects the land H2O. And besides these sort chemicals assorted with rain H2O and rain H2O transported them in to our imbibing beginnings. Such as rivers, lakes and etc. This has become a major issue at present. The shit paces, after stabilisation of solid waste utilizing calcium hydroxide and cement can be used for the building of assorted development undertakings like edifice sites, resort areas, recreational countries etc. this scheme is really advantageous when urban countries are concerned where sufficient infinite can non be found for recreational intents and other sort of development undertakings. Besides the stabilised solid waste can be economically used as fills for roads and roads embankments. Waste can be slackly defined as any stuff that is considered to be of no farther usage to the proprietor and is, therefore discarded. Waste is generated universally and is a direct effect of all human activities. Wastes are by and large classified into solid, liquid and gaseous. In developing states unfastened garbage dumps are common, due to the low budget for waste disposal. Open dumping of municipal solid waste is a common pattern in Sri Lanka. The disposal of wastes in landfill sites has progressively caused concern about possible inauspicious wellness effects for population life nearby, peculiarly in relation to those sites where risky waste is dumped. In the environment, chemicals and other contaminations found in solid waste can ooze into our groundwater and can besides be carried by rain H2O to rivers and lakes that are our beginnings for imbibing H2O. The shit paces, after stabilisation of solid waste utilizing calcium hydroxide and cement can be used for the building of assorted development undertakings like edifice sites, playgrounds recreational countries etc. this scheme is really advantageous when urban countries are concerned where sufficient infinite can non be found for recreational intents and other sorts of development undertakings. Besides the stabilised solid waste can be economically used as fills of roads and route embankments. Comprehensive research works must be carried out to measure the suitableness of stabilised solid waste for route fills in footings of its strength.LITERATURE REVIEWThis research is all about the traditional dirt stabilizers viz. lime and cement. The stabilisation mechanisms and the effectivity of those stabilizers have been demonstrated by many research workers in many applications. This literature reappraisal focal point on the known belongingss of traditional stabilizers as relevant to the r esearch.Soil stabilisationStabilization was defined as the betterment of dirt strength under applied burden by Bulbul ( 2013 ) and besides stabilisation was described as the change of the dirt belongingss by chemical or physical agencies in order to heighten the technology quality of the dirt by Ankit ( 2013 ) .In general dirt stabilisation can be described as a procedure of bettering certain coveted belongingss in dirt stuff. Soil stuffs which have been thought non utile in technology application can be improved utilizing dirt stabilisation procedure. McNally ( 1998 ) showed that the betterments of dirt belongingss are caused by dirt stabilisation can include the undermentioned strength, volume stableness and lastingness features. Sodium and K cations are normally found in expansive clay dirt and those can be exchanged with cations like Ca, which are found in calcium hydroxide, Portland cement and fly ash. This is a rapid reaction and ion exchange procedure takes topographic point frequently within a few hours. The Ca cations replace with the Na cations around the dirt atoms. So soil stabilisation is a long term strength addition activity. ( Justin 2004 ) Soil stabilisation is really utile when it is more economical to get the better of a lack in a readily available stuff than to convey in one that to the full complies with the demands of specification for the dirt ( Ola,1975 ) . This dirt stabilisation method can be used where no other economic option is available. The chief addictives for dirt stabilisation,Gravel crushed sumPortland cementCalcium hydroxideThe magnitude of dirt stabilisation is measured by the addition in strength as determined from unconfined compaction testing.Lime stabilisationThere are t wo primary types of calcium hydroxide is used today in the building field are quicklime ( Calcium oxide ) and hydrated calcium hydroxide ( calcium hydrated oxide ) . Heating limestone at higher temperatures produces quicklime and the add-on of H2O to the calcium oxide produces hydrated calcium hydroxide ( 5 ) . Equation ( 2.1 ) shows the reaction of limestone when it is heated. That produces quicklime with C dioxide as a by-product. CaCo3+ Heat i? CaO + CO2( 2.1 ) Equation ( 2.2 ) shows that add-on of H2O to the calcium oxide CaO produces hydrated lime/Ca ( OH )2with heat as a byproduct. CaO +H2O i? Ca ( OH )2+ Heat ( 2.2 ) Soil conditions and mineralogical belongingss have a important consequence on the long-run strength addition in dirt and lime blend ( 5 ) . Introduction of Ca hydrated oxide increases Ph, doing the silicon oxide and aluminum oxide in the clay particles to go soluble and interact with the Ca in a pozzolanic reaction ( 5, 7 ) . A pozzolonic reaction between silicon oxide or aluminum oxide in the clay atoms and Ca from the calcium hydroxide can organize a cemented construction that increases the strength of the stabilised dirt. Residual Ca must stay in the system to unite with the available silicon oxide or aluminum oxide and to maintain the pH high plenty to keep the pozzolanic creative activity ( 5 ) . The per centum of calcium hydroxide used for any undertaking depends on the dirt type being stabilized. The finding of the measure of calcium hydroxide is normally based on an analysis of the consequence that different calcium hydroxide per centums have on the decrease of malleability and the addition in strength of the dirt. However, most all right grained dirt can be efficaciously stabilized with 3 % -10 % of calcium hydroxide, based on the dry weight of the dirt. Lime is used extensively to alter the technology belongingss of powdered dirts. It is most effectual in handling plastic clays capable of keeping big sum of H2O ( 6 ) . 2.1.2 Cement stabilisation Portland cement is a multi-mineral compound made up of Ca oxide, aluminum oxide, silicon oxide and Fe ( 5 ) . When stabilisation of dirt is done by blending dirt with cement in different proportions is called as dirt cement stabilisation. Soil cement is a mixture of powdered dirt and mensural sum of H2O and cement, compacted to desired denseness and cured ( 1 ) . When cement is assorted with H2O, cementing compound of calcium-silicate-hydrate ( C-S-H ) and calcium-aluminate-hydrate ( C-A-H ) are formed ( 5 ) . With lime stabilisation, the silicon oxide is provided when the clay atom is broken down. With cement stabilisation, the cement already contains the silicon oxide without necessitating to interrupt down the clay mineral. Therefore, unlike lime stabilisation, cement stabilisation is reasonably independent of the dirt belongingss. ( 8 ) . Some Ca is available to respond with the clay atom early in the alteration procedure when H2O is added, and extra Ca becomes available subsequently as it forms during cement hydration ( 5 ) . The hydrates help to stabilise disturbed clay atoms through cementation. The hydration reactions and strength additions for the most portion between 24 hours and 28 yearss ( 5 ) . The function of cement is to better the technology belongingss of available dirt such as strength squeezability, permeableness, swelling possible and sensitiveness to alter in wet content. Soil cement stuffs range from semi flexible to semi stiff depending on the type of dirt and sum of dirt used ( 1 ) .

Ways in Which Zimbabwe Has Tried to Address Gender...

[pic] Faculty of Social Science Name : Sharron Surname : Mashave Reg # : R113505J Level: 2.1 Mode of Entry : Parallel Module : Gender Studies Lecturer: Mr. T. T. Mugodzwa Department : Politics and Public Management Question : a) Discuss four ways in which the education system in your country constructs the gender inequalities. [12] b) Suggest four ways in which the education system in your country can be made gender responsive. [8] a) It has become apparent that since time immemorial the girl child has been socialized to believe that she is inferior in some way or another to her male counterpart. This has been showcased in areas such as education, culture and religion.†¦show more content†¦It is apparent that the education system was also dominant in perpetuating the gender inequality in that there was no special attention given to trying to balance the number of male students and female students in schools. Culturally it was believed that it is better to educate a boy than a girl so in low income families the decision was obvious if a choice had to be made, the boy would get the education while the girl would be married off or used to do all the cooking and cleaning in the homestead. Had there been a sort of quota implemented, this would have ensured that more girls would get an opportunity to be educated. The above are some of the constructs the education system used to create or promote gender inequality. b) Zimbabwe has come a long way in becoming gender responsive to gender inequalities in the educational system. â€Å"Zimbabwe became signatory to many conventions and protocols on gender issues, such as the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW), The Equal Remuneration Convention, The SADC Declaration on Gender, and the Beijing Declaration and Platform of Action (1995). 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