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Accounting Treatment of Goodwill in IFRS and US GAAP

Author

Listed:
  • Jerman Mateja

    (Faculty of Management, University of Primorska, Cankarjeva 5, 6000 Koper, Slovenia)

  • Manzin Massimo

    (Faculty of Management, University of Primorska, Cankarjeva 5, 6000 Koper, Slovenia)

Abstract

The article presents an overview of the new accounting treatment of goodwill regarding International Financial Reporting Standards and American Generally Accepted Accounting Principles. Goodwill acquired through a business combination is no longer amortized but tested for impairment. Despite the fact that the objective of the new International Financial Accounting Standard has been to move towards international convergence; significant differences between standards still exist. The article presents the main changes of the regulation in the last years and the key differences between the two accounting treatments. In spite of the new accounting approach there are still lots of discussions, which indicate that the field is still not properly regulated. Finally, the article offers possible directions for future research and reporting practice.

Suggested Citation

  • Jerman Mateja & Manzin Massimo, 2008. "Accounting Treatment of Goodwill in IFRS and US GAAP," Organizacija, Sciendo, vol. 41(6), pages 218-225, November.
    • Handle: RePEc:vrs:organi:v:41:y:2008:i:6:p:218-225:n:3
    DOI: 10.2478/v10051-008-0023-5
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    References listed on IDEAS

    as
    1. Daniel A. Bens, 2006. "Discussion of Accounting Discretion in Fair Value Estimates: An Examination of SFAS 142 Goodwill Impairments," Journal of Accounting Research, Wiley Blackwell, vol. 44(2), pages 289-296, May.
    2. Wolfgang Schultze, 2005. "The Information Content of Goodwill-Impairments under FAS 142: Implications for External Analysis and Internal Control," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 57(3), pages 276-297, July.
    3. Suzanne Sevin & Richard Schroeder & Sak Bhamornsiri, 2007. "Transparent financial disclosure and SFAS No. 142," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(7), pages 674-687, July.
    4. Gerald Lander & Alan Reinstein, 2003. "Models to measure goodwill impairment," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 9(3), pages 227-232, August.
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    Cited by:

    1. Igor Stubelj, 2010. "Valuation of Slovene Publicly Traded Companies with a Valuation Model Based on Expected Earnings and Growth Opportunities," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 8(1), pages 023-047.

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