What is weighted Average profit method ?

By Sandeep Kumar

 The Weighted Average Profit Method is a technique used to determine the goodwill in a business acquisition. It involves calculating the average profit of a business over a specific period and then assigning different weights to the profits of each year based on their relevance. This method is often used to smooth out fluctuations in profits and provide a more stable basis for valuing the business. The weighted average profit is then used in the goodwill calculation formula to assess the intangible value of the acquired business.

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