TY - GEN

T1 - Goodwill impairment versus amortization

T2 - 27th International Business Information Management Association Conference - Innovation Management and Education Excellence Vision 2020: From Regional Development Sustainability to Global Economic Growth, IBIMA 2016

AU - Generalova, Natalia

AU - Sokolova, Natalia

AU - Popova, Ekaterina

N1 - Publisher Copyright: Copyright © 2016 International Business Information Management Association

PY - 2016/12/31

Y1 - 2016/12/31

N2 - This paper is dedicated to the research of subsequent evaluation of goodwill and is mainly aimed at a comparative analysis of 'amortization approach' and 'impairment-only approach'. Under a lot of criticism concerning goodwill amortization, in 2004 in IFRS the approach of 'goodwill amortization' was replaced by 'impairment-only' approach. In spite of the validity of the 'impairment testing' approach to the subsequent accounting for goodwill, which is based on the essence of treatment of 'goodwill', the application of this method in practice by companies has revealed a number of significant drawbacks. The return to the 'amortization approach' can make the financial reports more transparent and eliminate 'subjective factor'. At the same time, 'impairment of goodwill' approach enables companies to reflect the specific features of their activities and the effect from business combination. The research was carried out to estimate the impact of chosen method subsequent accounting for goodwill (impairment or amortization) through the analysis of sample of companies located in different countries. Besides, it presents 'pros and cons' these methods.

AB - This paper is dedicated to the research of subsequent evaluation of goodwill and is mainly aimed at a comparative analysis of 'amortization approach' and 'impairment-only approach'. Under a lot of criticism concerning goodwill amortization, in 2004 in IFRS the approach of 'goodwill amortization' was replaced by 'impairment-only' approach. In spite of the validity of the 'impairment testing' approach to the subsequent accounting for goodwill, which is based on the essence of treatment of 'goodwill', the application of this method in practice by companies has revealed a number of significant drawbacks. The return to the 'amortization approach' can make the financial reports more transparent and eliminate 'subjective factor'. At the same time, 'impairment of goodwill' approach enables companies to reflect the specific features of their activities and the effect from business combination. The research was carried out to estimate the impact of chosen method subsequent accounting for goodwill (impairment or amortization) through the analysis of sample of companies located in different countries. Besides, it presents 'pros and cons' these methods.

KW - Accounting for goodwill

KW - Amortization

KW - Consolidation financial statements

KW - Impairment

UR - http://www.scopus.com/inward/record.url?scp=84984645074&partnerID=8YFLogxK

M3 - Conference contribution

AN - SCOPUS:84984645074

T3 - Proceedings of the 27th International Business Information Management Association Conference - Innovation Management and Education Excellence Vision 2020: From Regional Development Sustainability to Global Economic Growth, IBIMA 2016

SP - 1549

EP - 1559

BT - Proceedings of the 27th International Business Information Management Association Conference - Innovation Management and Education Excellence Vision 2020

A2 - Soliman, Khalid S.

PB - IBIMA

Y2 - 4 May 2016 through 5 May 2016

ER -