Accounting for Goodwill: a Controversial Topic in Accounting?

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Abstract
The aim of this short paper is targeted at broadening general understanding of the impact of accounting for goodwill in the Non-for-Profit environment based on its financial practicability and how a focus on the fair value of goodwill goes to the heart of the value of an Organization. Various amendments and new accounting rules; Enron and WorldCom misfortunes; Ponzi Schemes and other white collar financial frauds have brought about stricter governance and financial statement reporting responsibilities on organizations, including the government and non for profits organizations. The enactment of the 2002 Sarbanes-Oxley Act; the GASB Statement 34; and the FASB No. 142 has been ways to improve how financial statements are prepared,
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Goodwill Defined: Perspective of various regulatory bodies
Goodwill being a controversial topic in Accounting has derived its definitions from various accounting bodies in us and overseas. The concept of goodwill has been around probably as long as formal accounting systems have been in place, going back probably to the Phoenicians. A variety of definitions of goodwill have evolved over the last two centuries. However, these attempts have been surprisingly unable to capture a comprehensive definition of the term once and for all and in all situations. (Valuing Intangible Assets, 1999, pg.7) Below are some of the definitions and descriptions of goodwill.
1. In earlier common practice in the United Kingdom, the British defined goodwill as the probability that an enterprise’s customers or patrons would continue to do business with it, and value its products and services above those available from other companies or purveyors. (Valuing Intangible Assets, 1999, pg. 7)
2. The American Heritage Dictionary defined goodwill as the positive reputation of a business viewed as an asset, equal to the excess cost required to acquire the business over the fair market value of all other assets.
3. The American Institute of Certified Public Accountants (AICPA) has described goodwill as all those intangibles and supporting assets that contribute to the advantage that an established business has over a comparable business that is about to be started—in other words, image,

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