Goodwill and Current Costs in Large Corporate Transactions
25 Pages Posted: 1 Dec 2005
Date Written: 2004
Abstract
This paper analyzes several issues: 1) the efficiency of the new US goodwill rules, particularly within the context of large corporate transactions - Statement no. 141, Accounting for Business Combinations, and Statement no. 142, Accounting for Goodwill and Intangible Assets - 2) the goodwill impairment calculation, 3) potential problems and concerns raised by accounting practitioners and professionals in industry, 4) discretion and mis-statements in application of SFAS 142, 5) Current cost accounting. The series of transactions done by Encompass Services Inc., is used to illustrate various reasons for changes in the disclosure and accounting requirements for Goodwill.
Keywords: goodwill, M&A, disclosure, valuation, current costs
Suggested Citation: Suggested Citation