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Journal articles on the topic 'Accounting for goodwill'
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Pechlivanidis, Eleftherios, Dimitrios Ginoglou, and Panagiotis Barmpoutis. "Debt crisis, age and value relevance of goodwill: evidence from Greece." International Journal of Accounting & Information Management 30, no. 2 (February 22, 2022): 189–210. http://dx.doi.org/10.1108/ijaim-10-2021-0215.
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Purpose The purpose of this study is to investigate the value relevance of goodwill and its additional aspects during a long-term period in Greece. Furthermore, by implementing two of the most popular value relevance models, the Ohlson’s price and Easton and Harris’ return model, this study examines the impact of goodwill on Greek stock prices from 2007 to 2018, a period of 12 years in which International Financial Reporting Standards (IFRS) are applied. Furthermore, this study analyzes how goodwill’s value relevance changes as it ages and during the Greek debt crisis. Design/methodology/approach In order to test the value relevance of goodwill we implemented two of the most popular value relevance models, Ohlson’s price and Easton and Harris’ return model. Our sample consists of non-financial listed Greek companies that reported positive goodwill accounting balances on their financial statements during the financial period from 2007 to 2018. Finally, we applied fixed-effects regression model to all equations. Findings The results provide evidence that the year-end goodwill accounting balance is value relevant, and that the debt crisis has improved goodwill’s information content. Finally, the empirical findings suggest that only current year acquired goodwill is value relevant compared to older goodwill, and therefore, goodwill’s impact on stock prices is decreasing as it ages. Research limitations/implications A noteworthy limitation of this study is that it focuses on a specific code-law country Greece, which is a relatively small economy compared to the whole Eurozone. This research contributes to the research literature as it confirms other research findings in the European context and specifically that goodwill based on IFRS is value relevant to financial statement users. Additionally, it investigates for the first time how goodwill was affected by the Greek debt crisis. Finally, it contributes to other researcher’s debate concerning the duration of goodwill’s value relevance in a code law environment such as Greece. Practical implications Financial analysts and institutions are provided with more assurance about goodwill’s financial reporting quality to be embedded in the financial evaluation process of corporates. As this research confirms that goodwill should be regarded as an asset, companies should obtain better financial ratings from financial institutions and investors and thus will have better access to equity and debt funding. Originality/value We investigate the value relevance of goodwill in Greece during a long-term period of 12 years. Additionally, our study examines the impact of the Greek debt crisis on the information content of goodwill accounting balances and the period during which accumulated goodwill balances and within-year acquired goodwill maintain its value relevance. Our research could assist accounting standard setters such as the International Accounting Standard Board to evaluate the quality of specific standards such as IFRS 3 “Business Combination” and IAS 38 “Impairment of Assets.”
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BLOOM, MARTIN. "Accounting For Goodwill." Abacus 45, no. 3 (September 2009): 379–89. http://dx.doi.org/10.1111/j.1467-6281.2009.00295.x.
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Paugam, Luc. "Accounting for Goodwill." International Journal of Accounting 46, no. 3 (September 2011): 351–54. http://dx.doi.org/10.1016/j.intacc.2011.07.004.
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Bisogno, Marco. "Goodwill and accounting discretion." Scholedge International Journal of Management & Development ISSN 2394-3378 2, no. 10 (November 9, 2015): 9. http://dx.doi.org/10.19085/journal.sijmd021002.
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<p>Purpose: The aim of the paper is to investigate earnings management practices related to goodwill accounting, focusing on its first recognition as well as its write-offs, due to the impairment test.</p><p>Design/methodology/approach: The study refers to a sample of Italian listed firms and the analysis covers three years, with a total of 591 firm-year observations. The modified Jones’ regression model has been used in estimating discretionary accruals, as a proxy of earnings management practices.</p><p>Findings: A positive relationship between discretionary accruals and yearly changes in goodwill has been proved. Findings also show an incidence of leverage and performance.</p><p>Research limitations/implications: The study focuses on a single context (Italy) and it is essentially based on financial-economic variables.</p><p>Practical implications: Findings of the study could be relevant for standard-setters in future revisions of goodwill accounting.</p><p>Social implication: The study could support investors in evaluating the incidence of first recognition as well as goodwill impairment on the quality of earnings.</p>
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HIGSON, CHRIS. "GOODWILL." British Accounting Review 30, no. 2 (June 1998): 141–58. http://dx.doi.org/10.1006/bare.1997.0059.
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Veryha, Yustina, Olena Koba, and Roza Nurgalieva. "Goodwill as an accounting category." ЕКОНОМІКА І РЕГІОН Науковий вісник, no. 4(75) (December 27, 2019): 146–51. http://dx.doi.org/10.26906/eir.2019.4(75).1868.
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Under modern conditions, the decisive factor for success is the availability of intellectual resources and their effective use in economic activity. Goodwill acts as an important tool to strengthen the competitiveness of a business entity because it provides additional benefits to the enterprise. The article summarizes approaches to the interpretation of the concept of “goodwill”, presented in regulatory legal acts and scientific literature. It is established that both regulatory and scientific sources do not contain a single statement of the concept of “goodwill”. The signs of goodwill are defined with the aim of interpreting this concept.
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Garzella, Stefano, Salvatore Ferri, Raffaele Fiorentino, and Francesco Paolone. "The (in)coherence in accounting for goodwill." Meditari Accountancy Research 28, no. 2 (September 19, 2019): 311–25. http://dx.doi.org/10.1108/medar-11-2018-0398.
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Purpose In the process of harmonizing International Accounting Standards (IAS/IFRS), scholars and standard setters still need to overcome unresolved issues related to both goodwill duration and accounting recognition. This paper aims to compare the academic background on goodwill with current IAS. Specifically, the goal is to criticize existing practices and advance a revision of accounting for goodwill. Design/methodology/approach The paper is based on a review of the relevant literature on notions, theories and accounting approaches on goodwill and on an investigation of IAS/IFRS on accounting for goodwill. By critically integrating literature and practices, the authors provide implications for a revision of IAS. Findings The findings show the two main internally coherent theoretical approaches and the incoherence in current goodwill accounting standards. The paper contributes to the debate on accounting for goodwill by suggesting new conceptual arguments in relation to the controversies related to its accounting treatment. Practical implications The findings offer insights and guidelines that can help standard setters revise current accounting standards. Inter alia, standards setters should revisit issues related to goodwill evaluation and record limitations in future debates to find better solutions. Originality/value This study shows the incoherence of current accounting standards. Furthermore, the findings contradict the general opinion that, in current IAS, goodwill can be recognized only if acquired in business combinations and not if internally generated. Thereby, the authors suggest to shift the international accounting standards board focus from the preference between amortization and impairment to the coherence of goodwill accounting approaches.
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Bepari, Md Khokan, and Abu Taher Mollik. "Regime change in the accounting for goodwill." International Journal of Accounting & Information Management 25, no. 1 (March 6, 2017): 43–69. http://dx.doi.org/10.1108/ijaim-02-2016-0018.
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Purpose This study aims to examine the impact of the recent regime change in accounting for goodwill, from the systematic periodic amortisation to the impairment testing, on the frequency and the extent of goodwill write-offs in the context of Australia. It also examines the impact of the change from the amortisation approach to the impairment approach on the value relevance of older goodwill. Design/methodology/approach The authors approach the first research question by comparing the actual amount of goodwill impairment charge by the sample firms with the minimum “as if” amortisation charge that would have been required under the amortisation regime. The authors approach the second question using a modified Ohlson model (1995), similar to Bugeja and Gallery (2006). The sample consists of 911 firm-year observations with the number of observations in the particular year being 238, 242, 220 and 211 in 2009, 2008, 2007 and 2006, respectively. Findings The findings suggest that the adoption of the impairment approach has decreased the frequency and the amount of goodwill write-off. The goodwill impairment amount is substantially less than the “as if” amortisation amount that would have been required under the amortisation regime. The results also suggest that older goodwill is now value-relevant, whereas goodwill purchased during the current year is not value-relevant. One reason for this may be that AASB 3: Business Combination allows for the provisional allocation of the purchase price to goodwill to be allocated to other identifiable intangible assets latter on. Hence, during the year of business combination, investors do not form a firm view of the amount of goodwill arising out of the business combination. Research limitations/implications This study uses data for the first four years since the inception of the impairment approach. Practical implications The findings of this study have important implications for the fair value accounting debate. The discretions allowed the managers under the impairment approach to improve the information content of goodwill. The relatively low levels of goodwill impairment even during the 2008-2009 global financial crisis contradict to the apprehensions found in the literature that managers will use the goodwill write-off as a tool for downward earnings management. The findings also imply that if managers are allowed with adequate flexibility through accounting standards rather than stipulating some systematic and mechanistic rules, the information value of the accounting measurement may improve. Social implications The findings feed into the debate of “rule-based” versus “principle-based” accounting standards and favours the “principle-based” accounting standards. The findings also contribute to the accounting measurement literature by concluding that if allowed with discretionary choices, managers may not always opt for the conservative accounting measurements (such as, recording goodwill write-offs). Originality/value Adopting an alternative approach, this study shows that the fair value accounting for goodwill has resulted in an optimistic approach to goodwill write-offs. It has also improved the information content of reported goodwill. This is the first known study addressing the research questions in consideration after the adoption of the goodwill impairment approach.
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Konečný, Alois, Oleksandra Lemeshko, and Jaroslav Sedláček. "The Concepts of Goodwill Accounting." International Journal of Economics and Statistics 10 (March 15, 2022): 48–52. http://dx.doi.org/10.46300/9103.2022.10.8.
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The paper “The concepts of goodwill accounting” analyzes and compares several problems arising from accounting techniques concerning goodwill according International Financial Reporting Standards or Generally Accepted Accounting Standards of the United States of America. It is concentrated on evaluation of the harmonization level between these two Standards and in cases where these standards differ it tries to suggest the better solution for the selected problem. At the beginning it is oriented on the definition of goodwill in both Standards that is unfortunately not very precisely stated. On the contrary the way of its value calculation is defined very well. In the next chapters is emphasized that there is precise differentiation between accounting for goodwill existing and/or acquired in course of entity`s ordinary business activity and the ones acquired in course of a business combination. And because this segregation is respected in the rest of this paper the accounting procedures concerning goodwill identification, useful life, amortization and connected values (carrying amount, recoverable amount, fair value and the amount of net consideration transferred) are studied from this points of view too. Last but one chapter is interested in impairment of goodwill and in the end there are particular gained knowledge generalized into final conclusions.
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Botalova, Victoria V. "Assessment of Goodwill According to International and Russian Accounting Standards." Economics of Contemporary Russia, no. 4 (December 31, 2022): 76–88. http://dx.doi.org/10.33293/1609-1442-2022-4(99)-76-88.
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Today the problem of accounting and reflecting business reputation (goodwill) in accounting (financial) statements remains relevant, since there are significant differences in the methodology for accounting and reflecting business reputation in Russian and international accounting (financial) reporting standards, as well as in accounting (including appraisal) practice. The article provides an up-to-date definition of the term “goodwill” (goodwill), discusses the features of accounting and reflection of positive and negative business reputation, and provides a comparative analysis of the main methods for assessing goodwill. Further, in detail, with relevant examples, the features of accounting and accounting for the impairment of goodwill in the event of the acquisition of shared ownership are considered. The calculations carried out in this article confirm the expediency of the proposed methodological analogies. The methods of accounting and evaluation of business reputation presented will allow companies’ management to better navigate the current features of goodwill accounting based on Russian and international financial reporting rules.
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Xie, Jun Ping. "Feasibility Analysis of the Confirmation of Self-Created Goodwill." Advanced Materials Research 756-759 (September 2013): 2538–41. http://dx.doi.org/10.4028/www.scientific.net/amr.756-759.2538.
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As the basis of outsourcing goodwill, self-created goodwill has a great impact on goodwill accounting. With the development of knowledge economy, the proportion of self-created goodwill is increasing in enterprise assets. This article tries to state briefly the origin, the existing problems and the causes of these problems of self-created goodwill and conduct a feasibility analysis of the confirmation of self-created goodwill through a profound analysis of the composition of it. Thus we will find out the approach to the confirmation of self-created goodwill, providing some valuable inspiration in the accounting circle of our country while dealing with goodwill accounting.
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Astami, Emita W. "Factors Explaining Management Preferences of Accounting for Goodwill Prior to the Implementation of IFRS 3: A Cross-Country Study." Gadjah Mada International Journal of Business 8, no. 1 (January 12, 2006): 43. http://dx.doi.org/10.22146/gamaijb.5624.
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This study provides evidence on the cross sectional relationship between firm economic variables and management preferences in the selection of an accounting technique for goodwill. It examines goodwill accounting policy disclosures in the 2000/2001 annual reports of 269 listed companies in the five countries: Australia, Hong Kong, Indonesia, Malaysia, and Singapore. The key focus is management’s choice of accounting techniques for the treatment of goodwill.The results show that accounting practices for goodwill vary significantly across country of origins and across industry groups. Two economic variables significantly explain management preferences of accounting for goodwill. The finding shows that the higher a company’s financial leverage ratio the company managers prefer to write off goodwill immediately against income or to capitalize and amortize it in a sorter period of time. The higher a company’s size, the more likely the company would write-off of goodwill to balance sheet reserves. Thus, this study provides empirical evidence that management preferences of accounting for goodwill have economic consequences.
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Zadorozhnyi, Z. M., and V. Yasyshena. "Intangible Assets Accounting and Reporting Issue." Marketing and Management of Innovations, no. 4 (2019): 182–93. http://dx.doi.org/10.21272/mmi.2019.4-15.
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The article examines the views of foreign economists on the importance of the impact of intangible assets (IA) and goodwill on business. The main purpose of this study is to improve and develop approaches of accounting for IA and goodwill, reflecting them in the financial and management reporting. The systematization of literary sources and the study of regulatory documents showed that there were several problematic issues related to the accounting and reporting of IAs and goodwill that needed elaboration and clarification. The urgency of solving this scientific problem lies in the fact that due to the existence of unresolved issues in accounting for IA and goodwill, as well as the formation of indicators in the financial statements, there is a significant gap between the methodology of accounting for these assets and current requirements of the economy. It is proposed to amend the Methodological Provisions № 417 by allocating the IA into a separate group for more detailed state statistical observation of these assets. It is recommended to separate the subaccount for accounting software showing the detailed information for this subaccount in the Notes to the Annual Financial Statements. To reconcile goodwill with the Plan of Accounts and Reporting, it is offered to set out the title of Section 1 of the Notes to the Annual Financial Statement, as follows: «Intangible Assets and Goodwill». It is recommended to keep records of internal goodwill in managerial and financial accounting, with the separation of the subaccount, with amendments to Section 1 of the Notes to the Annual Financial Statements regarding the inclusion of additional line 095 «Internal Goodwill». For management accounting of IA and goodwill, it is proposed to use the form of internal management reporting, which is based on paragraph 5 «Notes to the Annual Financial Statements», which contains additional indicators that allow the management system to identify IA s both at the respective centres of responsibility and their units, for different periods, to control the amount, direction, deviation of the planned and actual expenses at the receipt of IA, etc. It is recommended to open an additional subaccount for accounting for IAs shortages with the disclosure in the Annex to Methodological Recommendations № 1327 of the procedure for accounting for IAs shortages using this subaccount. It is justified that the Management Report should be considered as a supplement to the financial statements. The management report proposes to disclose the information about the IA and, if available, about goodwill (internal goodwill), and to provide information aimed at the development of intellectual capital. Keywords: brand, internal goodwill, management report, management report, identification, intellectual capital, intangible assets (IA); non-current assets, accounting, managerial reporting, financial reporting.
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Wang, Zhemin. "An Empirical Evaluation Of Goodwill Accounting." Journal of Applied Business Research (JABR) 9, no. 4 (September 27, 2011): 127. http://dx.doi.org/10.19030/jabr.v9i4.6003.
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While the current amortization period for goodwill is criticized by many financial statement preparers for being too short, the accounting profession and regulatory bodies indicate the intention of further reducing the amortization period. This study documents consistent evidence suggesting that any attempt to significantly shorten the amortization period may impose an unfair penalty on firms with goodwill assets and cause the reported goodwill to be significantly understated.
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Yasyshena, Valentyna, and Viktor Pyliavets. "Features of accounting of internal goodwill." Herald of Economics, no. 4 (March 16, 2022): 171. http://dx.doi.org/10.35774/visnyk2021.04.171.
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Introduction. The inability to reliably determine the value of enterprises is due to the lack of methods of objective assessment of the intangible component of the enterprise, i.e. internal goodwill. Internal goodwill is one of the specific objects that is difficult to identify and evaluate, as well as to establish the reliability of the recognition of the economic benefits of its use. This exacerbates the relevance of current accounting of domestic goodwill in the enterprise.Purpose. Systematization and improvement of methodological approaches to accounting for internal goodwill, which should be taken into account to substantiate the scientific and applied principles in assessing the value of the company.Methods. The theoretical basis of the study is the scientific work of scientists on the study of goodwill, intellectual assets. The methodological basis of the study is general scientific methods (abstraction, comparison, generalization, grouping, systematization, analysis, synthesis) - to improve methodological approaches to accounting for internal goodwill. Schematic method is to summarize the intangible resources of the company and the relationship between them in accounting and disclosure of the impact of intangible and intellectual assets on the brand (brand) and value of the company. Abstract-logical method is to formulate research conclusions.Results. The necessity of separating the concepts of external and internal goodwill in the accounting is substantiated and their comparative analysis is carried out on the relevant grounds. The influence of intangible resources on the value of the enterprise in the system of financial and management accounting with the establishment of relationships between them is identified. The necessity of reflection of internal goodwill during all current activity of the company in the form of unaccounted intangible assets with assignment to the corresponding group of intellectual assets on analytical accounts in the system of financial and administrative accounting of the enterprise is substantiated. The necessity of keeping records of intellectual capital formed at the enterprise with the opening of relevant sub- accounts is substantiated. The method of accounting is revealed, which will allow to account for intellectual capital on external and internal goodwill in order to avoid underestimation of the real value of the enterprise and will not contradict the principles of full coverage and balance sheet.Discussion. At the regulatory level, it is necessary to develop methods for the recognition, evaluation, documentation, accounting and reflection in the financial statements of items included in the internal goodwill for their reflection in the financial accounting system.
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Kimouche, Bilal. "Intangible Assets, Goodwill and Earnings Management: Evidence from France and the Uk." Folia Oeconomica Stetinensia 22, no. 1 (June 1, 2022): 111–29. http://dx.doi.org/10.2478/foli-2022-0006.
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Abstract Research background: The literature has argued that accounting for intangible assets and goodwill provides a wide range for managers to manipulate earnings. Purpose: This paper aims to investigate the impact of accounting treatment of intangible assets and goodwill on earnings management. Research methodology: The study included 115 French companies and 100 UK companies, during 2011–2019, employing multiple regression, where earnings management was measured through discretionary accruals; while accounting for intangibles and goodwill was divided into the capitalization and decapitalization of intangible assets, recognition and derecognition of goodwill, and depreciation and impairment of intangible assets and goodwill. Results: According to the results, accounting for intangible assets and goodwill has an impact on earnings management, while it is used differently between French and UK companies. In France, companies employ intangible assets capitalization to manipulate earnings, while UK companies use intangible assets capitalization and goodwill recognition. Novelty: This study provides supplementary evidence for standards setters, managers, and auditors about the contribution of accounting for intangible assets and goodwill in the quality of financial reporting and explores the new tools and practices of earnings management.
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Kirkham, Linda, and John Arnold. "Goodwill accounting in the UK." European Accounting Review 1, no. 2 (December 1992): 421–25. http://dx.doi.org/10.1080/09638189200000032.
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Weetman, Pauline. "Brand and goodwill accounting strategies." British Accounting Review 23, no. 3 (September 1991): 274–75. http://dx.doi.org/10.1016/0890-8389(91)90098-m.
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Schultze, Wolfgang, and Andreas Weiler. "Goodwill accounting and performance measurement." Managerial Finance 36, no. 9 (August 10, 2010): 768–84. http://dx.doi.org/10.1108/03074351011064645.
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Li, Kevin K., and Richard G. Sloan. "Has goodwill accounting gone bad?" Review of Accounting Studies 22, no. 2 (May 6, 2017): 964–1003. http://dx.doi.org/10.1007/s11142-017-9401-7.
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Shahwan, Yousef. "Review of accounting for goodwill: Historical to current perspectives." Corporate Ownership and Control 8, no. 3 (2011): 233–41. http://dx.doi.org/10.22495/cocv8i3c1p6.
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Accounting for goodwill is one of the most controversial issues in financial reporting. It has been on the agenda of the International Accounting Standards Board (IASB) as well as the Accounting Standards Board of Australia, the UK, and the US. IASB has also identified accounting for intangible assets (including goodwill) as a high priority. The objective of the present paper is to review the developments of accounting standards for goodwill made by the USA, UK, Canada, Australia, and the IASB. Reference to accounting and financial regulations is made to explore the effect of standard developments in promoting uniformity of practice in accounting for goodwill. Content analysis approach is adopted in this study. It concludes that the current regulations to account for goodwill provide little and further developments are still ahead.
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Li, Ng Shir, and Dennis W. Taylor. "The Value Relevance of Goodwill: IFRSs and Global Financial Crisis (GFC)." International Journal of Accounting and Financial Reporting 8, no. 2 (April 25, 2018): 26. http://dx.doi.org/10.5296/ijafr.v8i2.12830.
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This study contributes to the issue of accounting for goodwill by examining the impact of changing from the Australian Generally Accepted Accounting Principles (AGAAP) to Australian International Financial Reporting Standards (AIFRS) on goodwill, 3 years (2002 to 2004) before and 3 years (2006 to 2008) after AIFRS adoption. The sample is drawn from top 200 companies listed on the Australian Stock Exchange (ASX). This study applies multiple regressions. The dependent variable is the closing share price 3 months after the balance sheet date. The independent variables consist of earnings per share, book value per share, goodwill in the balance sheet, goodwill in the income statement (goodwill amortisation and goodwill impairment) and goodwill acquisition. The findings indicate that goodwill accounted for in the income statement and balance sheet do not provide increased explanatory power of market value under AIFRS compared to AGAAP. Moreover, the goodwill in the income statement does not show value relevance in year 2007, but became significant in year 2008 during the global financial crisis (GFC). Also, the age of goodwill recorded in the balance sheet does not affect the value relevance of earnings and book value in the post-adoption period. This study contributes new evidence on accounting for goodwill under pre and post-IFRS accounting regimes in Australia. This is also the first study to examine the separate effects of goodwill accounting on earnings and net assets, with special attention given to the period before and during the GFC in capital markets.
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Nethercott, Les, and Dean Hanlon. "When is Goodwill not Goodwill? The Accounting and Taxation Implications." Australian Accounting Review 12, no. 26 (December 31, 2008): 55–63. http://dx.doi.org/10.1111/j.1835-2561.2002.tb00195.x.
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PLOTNIKOV, Viktor S., and Olesya V. PLOTNIKOVA. "The duality of goodwill assessment in financial accounting and reporting." International Accounting 22, no. 4 (April 15, 2021): 372–91. http://dx.doi.org/10.24891/ia.24.4.372.
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Subject. This article considers Goodwill as an indicator of the organization's market capitalization and internally created Goodwill as a set of transaction expenses, and discusses the dual nature of Goodwill as an economic resource of the organization. Objectives. The article aims to explore the economic content of the Goodwill category and interpret it in terms of accounting considering differences in the measurement of Goodwill value as a result of a business merger transaction and internally created Goodwill that shapes its value by capitalizing transaction expenses. The article also aims to prove the need to reflect Goodwill in financial statements as an indicator of the organization's market capitalization and internally created Goodwill as a set of transaction expenses. Methods. To methodologically substantiate the economic category of Goodwill, we used the Conceptual Framework for Financial Reporting, International Concept of Integrated Reporting, institutional economics, and the International Financial Reporting Standards. Results. The article proves the dual nature of the economic category of Goodwill, which is crucial in the development of the methodological provision of this category in the organization's accounting and financial reporting system and the assessment of its value. Conclusions. Lack of transparency in the financial statements of individual economic entities and consolidated reporting of the group's enterprises allows for combining different economic resources in one item, for example, Intangible Assets. The inclusion of Goodwill, which is the result of a business merger transaction, does not correspond to its economic content, as Goodwill in this case is part of the investment made by the investor in the object of investment. Even for this reason alone, this figure should be reflected in the structure of financial capital.
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Saastamoinen, Jani, Arsen Djatej, Kati Pajunen, and M. David Gorton. "Practitioner views of goodwill accounting under US GAAP." Journal of Applied Accounting Research 21, no. 4 (July 1, 2020): 783–98. http://dx.doi.org/10.1108/jaar-04-2019-0074.
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PurposeAccounting standards for goodwill may intensify the agency conflict. Since auditors evaluate intangible asset valuations, this study examines to what extent being an auditor (including Big 4 auditors) and being female as indicators of professional skepticism and conservatism predict accounting professionals' critical views of goodwill accounting under US GAAP.Design/methodology/approachStatistical analyses of a survey of accounting professionals in the Pacific Northwest region of the United States.FindingsThe respondents' views are dispersed from trust in GAAP to views reflecting management opportunism in goodwill accounting. While being an auditor (including Big 4 auditors) does not predict a critical perception, being a female auditor is correlated with critical views to some extent.Research limitations/implicationsThe survey was carried out in a limited geographical area and personal contacts were used to maximize the response rate, which may limit generalizability.Practical implicationsStandard setters can use the results to learn how practitioners perceive the current accounting standards for goodwill. The results provide users and preparers knowledge about potential pitfalls of goodwill accounting. Preparers could increase transparency to alleviate user concerns regarding managerial opportunism in goodwill accounting.Originality/valueThis paper extends the IFRS-based literature exploring practitioners' perceptions of accounting standards by focusing on goodwill accounting in the US GAAP environment. This study also contributes to the auditing literature by providing further evidence on how gender moderates an auditor's perception of accounting standards.
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Petersen, Christian V. "The value relevance of goodwill and goodwill amortization in a Danish setting." Corporate Ownership and Control 4, no. 1 (2006): 227–41. http://dx.doi.org/10.22495/cocv4i1c1p5.
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Based on data from the Danish Stock Exchange, this paper examines the value relevance of purchased goodwill and explores how goodwill should be measured subsequent to initial recognition. Danish accounting legislation requires capitalization and amortization of purchased goodwill. As of 2005 Danish listed companies must comply with international financial reporting standards (IFRS) issued by the International Accounting Standards Boards (IASB). An exposure draft (ED 3: Business Combinations) is presently under consideration by the IASB. If this exposure draft is implemented, Danish listed companies must carry out impairment tests on goodwill. The value relevance is tested by examining the association between goodwill and goodwill amortization and share prices, incremental to other accounting variables.The overall findings suggest that investors perceive goodwill as an asset with a long economic life time. The results support the Danish Financial Statements Act that requires capitalization of all purchased goodwill. The findings brings into question if goodwill amortization provides useful information to investors. This suggests that impairment testing might be an alternative way to measure acquired goodwill assets in subsequent years
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Sudyn, Yuliia. "The genesis of the “goodwill” concept in financial and managerial accounting." Herald of Ternopil National Economic University, no. 2(88) (June 6, 2018): 74–83. http://dx.doi.org/10.35774/visnyk2018.02.074.
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The paper provides an analysis of the evolution of the “goodwill” concept from 1982 up to now on the basis of definitions found in foreign and national literature. The study focuses on conceptual foundations for accounting goodwill at an enterprise. Within the study the following general and special research methods for describing economic phenomena and processes are applied: historical and logical – to identify evolutionary approaches to defining the concept of “goodwill”; generalization, grouping and comparison – to study the essence of economic concepts and reinforce their definitions; analysis, synthesis, induction and deduction – to describe the main features of goodwill which reflect the economic nature of the concept. Based on foreign and national research literature, a review of definitions for the concept of “goodwill” is presented in the chronological order. In the article, a reinforced definition is formulated, which is tailored to the current environment of doing business and requesting for information. The evolution of conceptual foundations for accounting goodwill which complies with international and national standards is described. The structure of goodwill is graphically de- picted in accordance with International Financial Reporting Standard 3 Business Combinations. It is found that goodwill at an enterprise is not always economically justified and does not indicate the existence of non-economic amenities. A significant difference is found between the interpretation of the concept of “goodwill” in accounting and economic interdisciplinary aspects. Speculative reasons for the positive variance in the implementation of integration agreements are described, which confirm the discrepancy between economic and accounting definitions of goodwill. It is pointed out that there is a need for the convergence of existing approaches in order to unify the conceptual foundations of goodwill as an accounting concept. It is proposed to record the internal goodwill on accounts as an economic embodiment of non-economic amenities that the enterprise owns.
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Frucot, Veronique G., Leland G. Jordan, and Marc I. Lebow. "A & B Companies: Impairment of Goodwill." Issues in Accounting Education 19, no. 3 (August 1, 2004): 369–76. http://dx.doi.org/10.2308/iace.2004.19.3.369.
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Accounting for goodwill has long been a theoretical problem for accountants. Although most businesses possess some goodwill, accountants record it only when a premium is paid in the acquisition of another company. Subsequent to acquisition, valuing goodwill becomes a problem. Statement of Financial Accounting No. 142, Goodwill and Other Intangible Assets (FASB 2001), is the current standard for testing goodwill for impairment. This case is designed to introduce you to the “real-world” problems that many practitioners are likely to encounter while implementing this new standard. The case involves two antagonists: an auditor eager to record an impairment of goodwill and a client even more eager to avoid recording any impairment. You must tactfully address both individuals' arguments and determine the correct method for accounting for goodwill and the standard for testing for impairment per SFAS No. 142.
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Mislavskaya, N. "The Theoretical Validity of Goodwill Accounting." Auditor 7, no. 9 (October 14, 2021): 50–54. http://dx.doi.org/10.12737/1998-0701-2021-7-9-50-54.
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The article analyzes the modern accounting practice of reflecting goodwill in the system of accounting accounts. As a scientific approach to solving this problem, the author uses an interdisciplinary approach, within which various aspects are used as a toolkit for solving the indicated problem. Based on the results of research on the theory and practice of corporate management, the author comes to the conclusion that the interpretation of the economic nature of goodwill is ambiguous, and, as a consequence, of its incorrect accounting. The identification and recognition of goodwill in the accounting (financial) statements as an asset is questioned.
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Comiskey, Eugene E., Jonathan E. Clarke, and Charles W. Mulford. "Is Negative Goodwill Valued by Investors?" Accounting Horizons 24, no. 3 (September 1, 2010): 333–53. http://dx.doi.org/10.2308/acch.2010.24.3.333.
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SYNOPSIS: Accountants have historically distanced themselves from the concept of negative goodwill on the premise that bargain purchases should not take place in the presence of efficient securities markets. This position has been a powerful influence on the accounting for negative goodwill for over half a century. However, in line with the expansion of fair value accounting, the latest accounting standard that addresses negative goodwill, SFAS No. 141(R), Business Combinations (FASB 2007), calls for the full recognition of bargain-purchase (negative goodwill) amounts. Rather than allocating some or all negative goodwill against selected acquired assets, as has been done previously, negative goodwill is now to be recognized in the year of the acquisition as a regular item of income or gain. In essence, SFAS No. 141(R) holds that the excess of the fair value of net assets acquired over the acquiring firm’s acquisition cost constitutes the receipt of value to the acquiring firm, and should be recognized as such. While this position may seem plausible, to our knowledge there has been no research that tests whether negative goodwill is valued. Based upon a sample of acquisition transactions involving negative goodwill, our research does not provide compelling evidence that markets value negative goodwill.
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Kobori, Kazuhiko. "Does amortization of goodwill effect on companies' profits and future cash flows?" International Journal of Research in Business and Social Science (2147- 4478) 9, no. 5 (September 18, 2020): 255–68. http://dx.doi.org/10.20525/ijrbs.v9i5.842.
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The International Accounting Standards Board (IASB) will discuss whether or not accounting rules for M&A change, and it plans to draw a conclusion in 2021. In view of this fact, it is considered that a series of large M&A have significant effects on corporate earnings worldwide. This paper examines whether the amortization and/or non-amortization of goodwill affect companies’ earnings and future cash flow, an analysis for which there are two reasons. First, IFRS initiates the debate on the premise of goodwill amortization. If goodwill is amortized, it will have a profound impact on corporate profits and cash flow. Second, M&A has recently increased in Japan due to the increase in retained earnings and because IFRS has not requested goodwill amortization. The conclusion is as follows: First, it has become clear that legally retained earnings accelerate M&A because they affect the future goodwill along with both accounting standards. Next, the results revealed that the amortization of goodwill corresponds with the future ROA in conformity with Japanese accounting standards. On the other hand, this study did not determine that goodwill affects ROA in IFRS companies. Particularly, IFRS firms invested greater amounts of money than did Japanese accounting firms. Therefore, IFRS firms' goodwill might not be effective applied to M&A within four years.
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Malijebtou Hassine, Nour, and Faouzi Jilani. "Determinants of Goodwill Impairment Losses under IAS 36: The French Case." International Journal of Accounting and Financial Reporting 7, no. 1 (June 13, 2017): 343. http://dx.doi.org/10.5296/ijafr.v7i1.11291.
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The present paper investigates the determinants of goodwill impairment losses under IAS 36. More specifically, this study examines the impact of earnings management, corporate governance and financial crisis on goodwill impairment losses reported by French firms following the adoption of IAS 36 on purchased goodwill. Based on a sample of 730 observations from 107 groups of companies that belong to the SBF 250 over the period 2006-2012, the findings of this research confirm largely our predictions. Indeed, main results show that managers impair goodwill to meet earnings management motives linked to CEO change, earnings smoothing, big bath accounting and financial crisis. Moreover, they reveal that French firms impair goodwill to response to debt renegotiation hypothesis. In addition, the findings demonstrate that French firms audited by a Big Four auditor record lower goodwill impairment losses. Thus, they highlight the role of audit quality to constrain managerial opportunism associated to goodwill impairment.This study illuminates the accounting standard-setters in understanding the determinants of goodwill impairment losses in France under IAS 36. Therefore, it contributes to the international actual debate on goodwill and to the international accounting literature.
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English, Linda. "Focus On Goodwill." Australian Accounting Review 5, no. 9 (June 1995): 2. http://dx.doi.org/10.1111/j.1835-2561.1995.tb00160.x.
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Majid, Jamaliah Abdul. "Contemporary Issues Surrounding an Impairment-Only Approach to Acquired Goodwill: A Selected Review." International Business Research 12, no. 4 (March 21, 2019): 90. http://dx.doi.org/10.5539/ibr.v12n4p90.
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This paper presents a selected review of contemporary issues surrounding an impairment-only approach to accounting for acquired goodwill and addresses the question of whether an impairment-only approach has resulted in an improvement in an accounting for goodwill. The review is structured around three main themes: concerned raised by stakeholders regarding an impairment-only approach, causes of the debates on goodwill impairment, and proposed solutions offered by stakeholders. The contribution of this paper to the debate on an impairment-only approach to acquired goodwill is to demonstrate that even though an impairment-only approach has posed implementation, auditing and enforcement challenges, it has also encouraged standard-setters, regulators and firms worldwide to make concerted efforts in bringing in more clarity to the valuation of goodwill and its impairment test. The review ends by offering practical ways forward on an accounting for acquired goodwill.
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Lemishovska, O., and I. Mazur. "Theoretical and methodological principles for accounting reflecton of goodwill: dialectics of development and directions of improvement." Economics, Entrepreneurship, Management 8, no. 1 (July 2021): 59–68. http://dx.doi.org/10.23939/eem2021.01.059.
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The rapid development of market relations, Ukraine's integration into the world economic space, encourage companies, in order to achieve competitive advantages, to explore new ways of capitalization. At the same time, the operations of purchase, sale, merger or acquisition of companies, the value of which directly depends on intellectual capital, are becoming more common. The difference in the assessment of market and book value of intellectual capital leads to a special economic and accounting category - goodwill.Despite the prospects of using such a component of assets as goodwill, today there are still a number of theoretical and practical problems, for example: problem of unambiguous understanding and interpretation of the essence of goodwill, methods of its valuation, and the practice of reflecting it in accounting and reporting by domestic enterprises. The study addresses issues related to establishing the nature of goodwill, its content as an intangible economic resource of the enterprise and the component of the value of capital and the problem object of accounting.The purpose of the work is to reveal the economic essence of goodwill as an object of accounting, to conduct a critical analysis of the current standardization of goodwill accounting, to generalize and systematize of existing problems in the formation of accounting information about this object. The task of this study is to formulate separate proposals for improving methodological approaches to accounting for goodwill, which are obtained on the basis of examined legislative and research sources of information. The scientific novelty lies in the substantiation of the accounting category of goodwill as a subjective value and an objectively existing resource, which should be actually reflected in accounting and reporting.
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Gadžo, Amra, and Benina Veledar. "Issues Relating to Goodwill Valuation." Ekonomski pregled 72, no. 2 (2021): 249–71. http://dx.doi.org/10.32910/ep.72.2.5.
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According to both theoretical and empirical research results, this paper has the aim to determine, the extent to which the current accounting regulatory framework (IFRS 3 and IAS 36) offers an adequate basis for correct valuation of goodwill. We have researched all the available critical reviews of the accounting treatment of goodwill and the quality of applying accounting regulations onto expression of the goodwill position in BH companies’ practices. The empirical research was conducted on all the companies in the Federation of Bosnia and Herzegovina (FBiH), which recorded goodwill in their balance sheets in the period from 2013 to 2018. The research results have shown a high level of subjectivity in the process of determining the value of goodwill, and great discrepancies in adhering to the accounting regulations in the part of additional valuation and expression of goodwill value in financial reports. This resulted in the fact that the share of companies in FBiH which express decreased values of goodwill is far greater than the share of companies in the European union (EU). The main contribution of this paper is the fact that this is the first comprehensive research on evaluation of goodwill in FBiH companies in comparison to the situation in the EU. Also, it confirms the Agency Theory and shows great subjectivity in evaluation which results in an unjustified expression of a higher operative success in financial reports.
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Hirschey, Mark, and Vernon J. Richardson. "Information content of accounting goodwill numbers." Journal of Accounting and Public Policy 21, no. 3 (September 2002): 173–91. http://dx.doi.org/10.1016/s0278-4254(02)00048-0.
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Grinyer, J. R., A. Russell, and M. Walker. "The rationale for accounting for goodwill." British Accounting Review 22, no. 3 (September 1990): 223–35. http://dx.doi.org/10.1016/0890-8389(90)90004-2.
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Comiskey, Eugene E., and Charles W. Mulford. "Goodwill, triggering events, and impairment accounting." Managerial Finance 36, no. 9 (August 10, 2010): 746–67. http://dx.doi.org/10.1108/03074351011064636.
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Martínez, Araceli Amorós, José Antonio Cavero Rubio, and Mónica Gonzáles Morales. "Accounting for goodwill: A literature review." Accounting 9, no. 1 (2023): 17–44. http://dx.doi.org/10.5267/j.ac.2022.9.002.
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This paper critically reviews the main empirical research on goodwill accounting with the purpose of informing and contributing to current debates: the application of a systematic amortisation plus an impairment when required (amortisation model) or an annual impairment-only test (impairment model). Using the main databases (ABI inform, ProQuest Central, Emerald, Science Direct, Scopus and Google Scholar), this critical review highlights the difficulty to resolve doubts at this stage. Arguments for and against the amortisation and impairment models are found. Nevertheless, going back to a systematic amortisation does not seem to be the solution but the impairment test model is eliminated. We also note that there is more room for improvement of the impairment model. Thus, we provide some guidelines and recommendations to improve it. Finally, we find that further investigation can be carried out to fill the gaps identified in the literature and we make recommendations for future research projects.
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Golden, Joanna, Li Sun, and Joseph H. Zhang. "Corporate Social Responsibility and Goodwill Impairment." Accounting and the Public Interest 18, no. 1 (November 1, 2017): 1–28. http://dx.doi.org/10.2308/apin-51971.
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ABSTRACT This study examines the relation between corporate social responsibility (CSR) and goodwill impairment. We rely mainly on the stakeholder theory and adopt the Posner (1974) public interest model to develop our predictions. Following prior research, we use CSR strengths (concerns) to measure responsible (irresponsible) CSR activities. We find a negative relation between CSR strengths and the likelihood of goodwill impairment, suggesting that firms with more responsible CSR activities better prevent goodwill impairment. In addition, we find a negative relation between CSR concerns and the magnitude of goodwill impairment losses, suggesting that firms with excessive irresponsible CSR activities seek to lessen the negative consequences of goodwill impairment. Overall, our findings demonstrate the importance of CSR in preventing goodwill impairment and mitigating the manipulation of (underreporting) goodwill impairment losses. JEL Classifications: G18; M14; M41. Data Availability: Data are available from the sources identified in the paper.
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Gray, Dahli, Monica Jorge, and Laura Rodriguez. "Goodwill Accounting Alternative: Private Versus Non-private Companies." Journal of Social Science Studies 3, no. 1 (October 16, 2015): 159. http://dx.doi.org/10.5296/jsss.v3i1.8433.
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<p>This article examines the accounting change effective after December 15, 2015 and illustrates the Goodwill Accounting Alternative available to private companies as introduced by the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-18 Business Combinations (Topic 805) Accounting for Identifiable Intangible Assets in a Business Combination—a consensus of the Private Company Council (PCC). The measurement and reporting results of private companies are compared with those of public business entities and not-for-profit entities (i.e., non-private companies) for the same in-scope transactions (i.e., acquisitions, assessing fair value under the equity method, and reorganizations). If a private company adopts the FASB ASU 2014-18, then it must also adopt the FASB ASU 2014-02 Intangibles-Goodwill and Other (Topic 350) Accounting for Goodwill—a consensus of the PCC. This results in the private company amortizing goodwill over 10 or fewer years using the straight-line method. Non-private companies use goodwill impairment testing involving fair value measurements. The illustration presented includes a comparison of the initial and subsequent period measurement and reporting requirements and results and indicates that financial accounting choice can result in a significant monetary difference in the total reported owners’ equity.</p>
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Yang, James G. S., and Frank J. Aquilino. "Measuring goodwill and noncontrolling interest under the new consolidation accounting standards." Journal of Financial Reporting and Accounting 15, no. 2 (July 3, 2017): 198–207. http://dx.doi.org/10.1108/jfra-05-2015-0055.
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Purpose The accounting standards for consolidated financial statements have been updated recently. The change involves the measurement of goodwill and noncontrolling interest. Under the new accounting standards, goodwill consists of not only the parent company’s portion but also the noncontrolling interest’s share. The noncontrolling interest comprises both the subsidiary’s identifiable net assets and goodwill. In addition, it further changes the treatment of noncontrolling interest from liability to equity. The change indeed has far-reaching consequences on financial statements. This paper formulates an equation to measure goodwill and noncontrolling interest. It also provides some examples for illustrative purposes. The purpose of this paper is to update the financial reporting to the current standards. Design/methodology/approach New accounting standards under FASB #141R and 160. Findings New accounting standards in measuring goodwill and noncontrolling interest in financial reporting. Research limitations/implications The knowledge is useful for accountants and financial analysts. Practical implications Improve the quality of financial statements. Social implications Investors will be better informed. Originality/value This new accounting standard was not explored before.
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Rakoto, Philémon. "Determinants of the corporate decision to record goodwill impairment loss: Canadian evidence." Corporate Ownership and Control 5, no. 2 (2008): 393–402. http://dx.doi.org/10.22495/cocv5i2c3p8.
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The initial application of the new goodwill accounting standard enables firms to record an actual goodwill impairment loss in their books without affecting their earnings. The recording of a goodwill impairment loss indicates that the acquiring firm paid an excessive premium at the time of the business combination, and that this goodwill does not enable it to generate future earnings. This study is based on the hubris hypothesis and governance structure and is aimed at predicting whether managers will choose to record a goodwill impairment loss. Using a sample of high-tech Canadian firms, we noted that firms where: (1) managers showed excessive confidence, (2) the CEO cumulates the function of chairman and (3) the dominant shareholder was also a manager tended to record a goodwill impairment loss. The results are consistent with those of previous studies, which suggest that systematic differences exist between firms that choose alternative accounting methods. Hence, the results provide further support in the developing framework of a positive theory of accounting methods.
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Majid, Jamaliah Abdul, Robiah Abu Bakar, and Nor Asma Lode. "The Timing of Goodwill Write-off: Cases of Initial Overpayment." International Business Research 9, no. 11 (September 26, 2016): 65. http://dx.doi.org/10.5539/ibr.v9n11p65.
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<p>This paper explores types of accounting choice related to reporting goodwill impairment losses, if any, exercised by Malaysian listed firms after an implementation of IFRS 3. The study is carried out through an in-depth analysis of annual reports for fifteen firms over a number of years. The fifteen firms selected are those that have goodwill arising from business combinations in December 2006/7, reported goodwill impairment losses in the current year or the future year(s), and the goodwill represents 50% or more of the acquisition price. Results show that of the fifteen firms examined, eight firms appeared to exercise the accounting choice in the form of opportunistic timing in reporting the impairment losses. The study contributes to the accounting choice literature by providing evidence on the timing of goodwill impairment losses for goodwill that arose from an apparent overpayment made at the time of an acquisition of a subsidiary.</p>
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Gros, Marius, and Sebastian Koch. "Discretionary goodwill impairment losses in Europe." Journal of Applied Accounting Research 21, no. 1 (September 17, 2019): 106–24. http://dx.doi.org/10.1108/jaar-03-2018-0039.
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Purpose The impairment-only approach to goodwill has regularly been criticized for offering too much discretion to managers and facilitating the manipulation of goodwill impairment losses. Extant research provides mixed results on whether managers exploit their inherent discretion informatively or opportunistically. The purpose of this paper is to examine the determinants of discretionary goodwill impairment losses in Europe. Design/methodology/approach The authors divide goodwill impairment losses into economically induced and discretionary parts. Thereafter, the authors examine the determinants of discretionary goodwill impairments. Findings The results indicate that discretionary goodwill impairment losses are used opportunistically rather than informatively. The authors find that managers exploit their discretion to “clear the deck” and to meet or beat analysts’ forecasts. However, the opportunistic behavior is constrained by corporate governance and enforcement mechanisms. Research limitations/implications The findings contribute to the current discussion on the suitability of the impairment-only approach by introducing inferences on how areas of discretion inherent in goodwill impairment testing are associated with management incentives and governance mechanisms in a European setting. Practical implications The results offer enforcers and standard-setters important insights into how mangers exploit discretion in goodwill accounting. These insights can help to identify firms that are likely to infringe upon the applicable accounting standards. Originality/value In contrast to prior research, the authors analyze the association among management incentives, governance mechanisms and discretionary goodwill impairment losses rather than the association with total or expected goodwill impairment losses. Moreover, to the best of authors’ knowledge, there is little empirical evidence based on a European (IAS 36) setting.
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Garcia, Clémence, Yuko Katsuo, and Carien van Mourik. "Goodwill accounting standards in the United Kingdom, the United States, France, and Japan." Accounting History 23, no. 3 (January 7, 2018): 314–37. http://dx.doi.org/10.1177/1032373217748672.
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In this article, we revisit the history of accounting for goodwill in the United Kingdom, the United States, France, and Japan following the conclusions and predictions of Ding, Richard and Stolowy (2008). We aim at verifying whether the four phases of development of the accounting for goodwill between 1880 and 2005 are actually determined by the global change from a stakeholder model of corporate governance to a shareholder model. An extended time frame of analysis (until 2016) is considered in this study, which includes Japan among the country-specific accounting systems investigated. Our findings do not support Ding et al.’s predictions for Japan and demonstrate a disagreement between those countries which consider goodwill as a depleting asset and those which consider goodwill as a permanent asset. This observation might explain better the current debate concerning international harmonization on goodwill.
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Zhang, Ivy Xiying, and Yong Zhang. "Accounting Discretion and Purchase Price Allocation After Acquisitions." Journal of Accounting, Auditing & Finance 32, no. 2 (July 27, 2016): 241–70. http://dx.doi.org/10.1177/0148558x15598693.
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The recent movement in standards setting toward fair-value-based accounting beyond financial assets and liabilities calls for more empirical evidence on fair-value measurement, especially that of intangible assets. This article studies the initial valuation of goodwill and identifiable intangible assets after acquisitions. We find that the allocation of purchase price to goodwill and identifiable intangible assets is related to the economic determinants of the valuation. However, it is also significantly affected by managerial incentives arising from the differential treatments of goodwill and identifiable intangible assets under Statement of Financial Accounting Standards (SFAS) 142. The same managerial discretions are not exhibited in the purchase price allocation prior to SFAS 142, when goodwill and other intangibles are both amortized. These findings suggest that unverifiable fair value measures are associated with the underlying economics but also deviate from the true values in the presence of management reporting incentives. Further analysis suggests that external appraisers constrain managerial discretion in intangible asset valuation to an extent but do not completely eliminate it.
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Tchatchou Tchaptchet, Julius Gaël, and Olivier Colot. "Goodwill’s Accounting Practices in Belgium and Compliance with IAS 36 Required Disclosures." International Business Research 12, no. 3 (February 20, 2019): 139. http://dx.doi.org/10.5539/ibr.v12n3p139.
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This paper aims at studying the impact of the accounting treatment of goodwill on the mandatory disclosure required by the International Accounting Standard (IAS) 36 on the impairment test of goodwill. We use a sample comprising 79 companies listed on Brussels stock exchange to show that there is a great heterogeneity in current accounting treatment of goodwill. We identify two groups of companies: those that display the goodwill on a separate line in their balance sheet and those that integrate it in their intangible assets. For the later, the only way to notice the presence of goodwill is by looking at the financial statement’s notes presumably because those notes are expected to receive less scrutiny. Even if the compliance is not complete, the first group complies more with the paragraph 134 of IAS 36 than the other. Moreover, companies with a significant goodwill compared to both total assets and intangible assets are more compliant with IAS 36. The findings finally reveal that the notices issued by the Financial Service and Markets Authority (FSMA) have a limited impact on the disclosure level. There are some areas of improvement but others such as goodwill allocation to cash generating unit, determination of the recoverable amount, description of key hypothesis and the sensitivity test need more effort on compliance.
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Beckman, Hans. "Verantwoording van goodwill bij overnames: purchased goodwill dan wel full goodwill." Maandblad Voor Accountancy en Bedrijfseconomie 82, no. 1 (January 1, 2008): 15–24. http://dx.doi.org/10.5117/mab.82.10857.
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In verband met de in de toekomst geldende IFRS 3 – naar verwachting ingaande 1 januari 2009 – waarin naast ‘purchased goodwill’-verantwoording ook ‘full goodwill’- verantwoording als mogelijkheid komt, wordt hierop in deze bijdrage ingegaan. Teneinde deze verantwoordingswijze goed in beeld te brengen, wordt eerst een uiteenzetting gegeven van de gangbare verwerking van goodwill bij aandelenacquisities onder de huidige wetgeving (Titel 9 Boek 2 BW; EU IFRS-regime). Stilgestaan wordt bij de achtergrond van de gebruikelijke en voorgestelde verwerkingswijzen. Tot de voorgestelde verwerkingswijzen behoort ook de ‘full goodwill approach’. Daarin wordt bij de overnemende partij de goodwill van de overgenomen onderneming verantwoord, ongeacht het aandelenbelang dat wordt verworven. De auteur acht deze methode een mooi bouwwerk, passend binnen IFRS. Het gevolg van dit voorstel is dat het deel van de goodwill dat samenhangt met de waardering van het minderheidsbelang, tegen marktwaarde op de geconsolideerde balans tot uiting komt. Aangenomen dat deze marktwaarde boven het evenredig aandeel in het saldo van de marktwaarden van de overgenomen onderneming uitkomt, heeft de voorgestelde verwerking een positief effect op de solvabiliteitsverhouding. Wel vraagt hij zich af waarom de International Accounting Standards Board (IASB) met dit voorstel is gekomen, nu de geldende verslaggevingsregimes en -praktijk niet blijk geven van wensen op dit terrein.