Goodwill is recognized in partnership accounts when

Goodwill is recognized in partnership accounts when a new partner is admitted. Goodwill is an intangible asset that represents the value of a business's reputation, brand name, customer relationships, and other intangible factors that contribute to the business's success. When a new partner is admitted into a partnership, they bring with them capital, skills, and other resources that contribute to the growth of the business. As a result, the value of the business increases, and the existing partners recognize the increase in the value of the business as goodwill. Goodwill is usually recorded in the books of accounts and is distributed among the partners based on their profit-sharing ratio.