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1.why do we find asset based valuation using 20×6 figures?but for all others included figures of 20x as well?
how do we know for which year we have to value bussines using net asset method?(i dont think so they have mentioned in question)2. why did we deduct goodwill?is it because, in sofp internally generated goodwill is not recorded?
sorry if these are silly doubts ,my brain is having tough time processing it 🙁
and thank you so much(for previous response also) 🙂
3. i watched question solvingin youtube of a reputed teacher,in that he finds mv using figures of 20×6 but doesnt deduct exceptional items while calculating PAT,why?
in exam kit,they have used extimated earnings of 20×7 to find mv.
which is the correct method?is both method correct? if yes,why didnt we duduct exceptional items for yr 20×6?As is stated in the examiners answer there is not really any one correct way of valuing on an asset basis.
However I do not know what you are meaning when you write that good will has been subtracted. The examiners answer take the net assts (including goodwill) and just adjusts for the value of the patent and the stock adjustment.As far as the date is concerned, on the information available the only sensible date to use is the latest SOFP.
I am looking at the examiners own suggested answer and I do not know what your exam kit (or your reputed teacher) has done 🙂
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