TITLE

EVOLUTION OF APPROACHES TO UNDERSTANDING THE ECONOMIC SUBSTANCE, ASSESSMENT AND RECOGNITION OF GOODWILL IN FINANCIAL REPORTING: PRE-REGULATORY STAGE (1571-1929)

AUTHOR(S)
IVANOV, Aleksei E.
PUB. DATE
December 2014
SOURCE
Economic Analysis;dec2014, Issue 48, p44
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The article discusses the origin and development of views on the economic substance of goodwill, its assessment at the stage of planning mergers and acquisitions. In addition, the article addresses goodwill recognition in financial statements of acquiring company and subsequent accounting. The author identifies three stages of this evolution: (1) Pre-regulatory (1571-1929); (2) Regulatory (1929-1960s of the 20th century); (3) Harmonic (1970s of the 20th century till present). In this article the author considers the Pre-regulatory stage. The characteristic of this stage is the origin of the "goodwill" concept and scholarly disputes about its economic nature in the conditions of weak regulation of goodwill recognition and measurement in accounting standards. The author has studied a great number of source publications and found out that the earliest mention of goodwill in legal texts and literary works (1571, 1766, 1786 and 1863) belongs to P.D. Leake in 1921. The author points out that the majority of researchers (from the twentieth century to modern times) of the history of views on the goodwill evolution refer to the Leake's works. The article contains a full bibliographic description of the sources quoted by Leake and the photographs of original texts of these sources; some quotes are more complete and the author provides personal comments on them. The article also includes the description and analysis of views of the most famous researchers of goodwill from the late 19th to the early 20th century, such as W. Harris, F. More, G.E.S Whatley, L.R. Dicksee, J. Charpentier, H.R. Hatfield, P. Magnin, J.F. Schär, E. Schmalenbach, P.D. Leake, W.A. Paton, F.W. Pixley, J.M. Yang, A.F. Saunders and others. The author specifies that during this period there was a broad diversity of opinions on the nature, valuation and accounting treatment of goodwill. The article can be useful for those interested in the history of goodwill concept development, in the history of accounting and economic analysis.
ACCESSION #
100043765

 

Related Articles

  • Levelling the playing field. Johnson, Todd // Accountancy;Feb1999, Vol. 123 Issue 1266, p80 

    The article portrays the need to achieve international convergence on methods of accounting for business combinations. Several U.S. companies have long complained that British companies they compete with in making takeover bids enjoy an unfair advantage. This is because British companies are...

  • Phasing it in. Kimmitt, Annette // Accountancy;Jun2004, Vol. 133 Issue 1330, p82 

    Focuses on the accounting for business combinations according to the International Accounting Standards Board. Factors behind the revisions to International Accounting Standards (IAS) 36 and 38; Difference in provisions under IAS 22 and International Financial Reporting Standard 3 for...

  • Companies Increase Use of 'Step Zero' Test, Study Shows. Whitehouse, Tammy // Compliance Week;Oct2014, Vol. 11 Issue 129, p9 

    The article informs that according to a recent analysis by valuation firm Duff & Phelps, companies are reporting increased use of the "step zero" method for determining whether goodwill on the balance sheet should be marked down. Topics include goodwill considered an asset on corporate balance...

  • GOODWILL AND INTANGIBLE ASSETS.  // Accountancy;Feb1998, Vol. 121 Issue 1254, p105 

    The article offers information on the Financial Reporting Standard 10 "Goodwill and Intangible Assets." The standard presents accounting principles for goodwill and intangible assets. It aims to ensure that purchased goodwill and intangible assets are charged in the profit and loss account when...

  • A post-merger pro forma picture.  // Accountancy;Feb2000, Vol. 125 Issue 1278, p84 

    The interim report of Vodafone AirTouch PLC, a telecommunications company, for the six months to 30 September 1999 includes pro forma financial information. On 30 June 1999, Vodafone Group PLC, world's largest mobile telecommunications network company, merged with a networking company AirTouch...

  • URGENT ISSUES TASK FORCE ABSTRACT 3 TREATMENT OF GOODWILL ON DISPOSAL OF A BUSINESS.  // Accountancy;Feb1982, Vol. 109 Issue 1182, p112 

    This article discusses the accounting treatment of goodwill on disposal of a business, according to the British Accounting Standards Board in February 1992. In consolidated accounts, the question arises how the profit or loss on disposal of an acquired business should be determined where...

  • Is It Time to Ditch EPS As a Measure of Real Value? Dobbs, Richard; Nand, Billy; Rehm, Werner // Mergers & Acquisitions: The Dealermaker's Journal;May2005, Vol. 40 Issue 5, p24 

    The article focuses on measuring the value of earnings per share (EPS). The dilutive effect of acquisitions involving the issuing of shares can be corrected by assessing the impact of acquisitions on EPS rather that on total net income. The accounting methodology International Financial Reports...

  • GETTING TO GRIPS WITH THE NEW GAAP. McCarthy, John // Accountancy Ireland;Oct2013, Vol. 45 Issue 5, p14 

    The article discusses the difference between the current Irish Generally Accepted Accounting Principles (GAAP) and the new GAAP, the Financial Reporting Standard (FRS) 102, which will take effect for accounting periods on or after January 1, 2015. FRS 102 is allowed to be adopted earlier for...

  • Taking the axe to pooling deals. Sikora, Martin // Mergers & Acquisitions: The Dealermaker's Journal;Jul/Aug99, Vol. 34 Issue 1, p8 

    Reports on a surge in stock swaps before the United States Financial Accounting Standards Board bans the pooling-of-interest treatment of corporate mergers. Accounting for goodwill under the purchase treatment, a rival method; Effects of the pooling ban, according to mergers and acquisitions...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics