Goodwill

“What is goodwill?” Based on the information on the internet, goodwill is defined as “the excess of purchase price over the fair market value of a company 's identifiable assets and liabilities.” Moreover, goodwill is reported as a non-current asset on the balance sheet. But the U.S companies are not required to amortize the record amount of goodwill since 2001. Because the value of goodwill is highly subjective, the accounting standard requires the goodwill to have impairment test at least once

Amortization Versus Impairment of Goodwill: Impact on Accounting Quality, Financial Statements’ Economic Value, Investors, and Auditors Accounting Standards Codification (ASC) replaced all U.S. financial accounting standards in July 2009. Consequently, ASC 350, Intangibles – Goodwill and Other, replaced SFAS 142, Goodwill and Other Intangible Assets in September 2011. Under ASC 350, goodwill must be periodically tested for impairment. Goodwill impairment is determined through a two-step process

Case 1 Goodwill Impairment Testing Should management have performed an interim goodwill impairment test as of September 30, 2010? Galaxy Sports Inc. (Galaxy) is a U.S. based manufacturer of sports equipment. It is an SEC registrant with one operating segment with three separate reporting units: fitness, golf and hockey. The fitness is the largest division of Galaxy with allocated goodwill of $200 million. The golf division reports $130 million of goodwill and the hockey has $30 million of goodwill

Goodwill is an asset that is an intangible asset. Goodwill represents the future economic benefits that arise from acquiring assets during a business amalgamation. A goodwill reflects the difference between the purchase price and the fair value of acquiring a company’s assets or a business merger. According to the generally accepted Accounting Principle goodwill is not amortized. Therefore, on the balance sheet there would not be an accumulated goodwill amortization. Impairment on a goodwill is tested

GOODWILL What is the definition of Goodwill? Goodwill is an intangible asset that mostly appears as the biggest intangible asset on the balance sheet. The Goodwill can only be identified with the business as a whole. Therefore, the goodwill cannot be sold individually in the marketplace, while some other intangible assets can be sold. Goodwill is not easy to measure, because it includes exceptional management, desirable locations, customer relations, and so on. The determination of the

standards regarding the valuation and impairment of goodwill; therefore, the primary source used is the FASB website. The focus of this paper will be on the valuation of goodwill in business combinations and the impairment of goodwill. This paper will not discuss the valuation of goodwill in an acquisition by a not-for-profit entity. The paper will first define key terms required for understanding FASB standards of the valuation and impairment of goodwill. The paper will continue on to outline International

Goodwill is an intangible asset, probably the most intangible of all intangible assets, hard to measure and even more difficult to account for. Goodwill today constitutes a much larger part of acquisition prices than it did previously, resulting in a much greater impact on financial statements. During the twentieth century the concept of goodwill has changed significantly. In the earlier days goodwill was thought of as the good and valuable relationships of a proprietor of a business with his customers

Goodwill is an intangible asset recorded on the balance sheet when one business acquires another business and when the purchase price, or carrying value, is greater than the fair market value. It includes the reputation, brand, geographic location, patents, employee commitments, and etc of the acquired company. Goodwill is calculated by deducting the carrying value from the fair market value of identifiable assets and liabilities. According to the FASB Accounting Standards Codification (ASB), which

In 2005, Sprint finalized the acquisition of Nextel. Since Sprint paid a considerate amount over the fair value estimate of Nextel, they reported the excess as goodwill. Following the purchase of Nextel, Sprint has had difficulty integrating the acquisition. Due to the continuing struggles of the acquisition, possible impairment may exist. The first step needed in identifying the possibility of impairment is various qualitative factors. Sprint falls into the three qualitative factors of increasing

Introduction Goodwill and impairment is very well related in accounting concept, impairment is a concept in accounting that explains stable reduction in value of asset (Dauang-ploy,O.,Shelton,M.,&Omer,K.,2005). To calculate impairment loss it is essential to de-cide the amount of value in use, and this involve the calculation of the cash flows which are supposed to be produced from the use of assets. Goodwill can only be recognised when it is obtain in business combination. Impairment Impairment