The (in)coherence in accounting for goodwill: Implications for a revision of international accounting standards
| Autor: | Stefano Garzella, Raffaele Fiorentino, Salvatore Ferri, Francesco Paolone |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Accounting for goodwill
Amortization (business) business.industry Process (engineering) 05 social sciences Economics Econometrics and Finance (miscellaneous) Accounting 050201 accounting Impairment test IAS/IFRS Preference Strategic management If and only if 0502 economics and business Goodwill Duration (project management) strategic management impairment test accounting for goodwill business IAS/IFRS Strategic management Impairment test Accounting for goodwill 050203 business & management Coherence (linguistics) |
| Popis: | PurposeIn 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/approachThe 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.FindingsThe 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 implicationsThe 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/valueThis 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. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|