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Goodwill — An Example of Puzzle‐Solving in Accounting
Author(s) -
MA RONALD,
HOPKINS ROGER
Publication year - 1988
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1988.tb00204.x
Subject(s) - goodwill , confusion , accounting , business , interpretation (philosophy) , computer science , psychology , psychoanalysis , programming language
The nature of goodwill continues to be misunderstood by most accountants and confusion surrounding the measurement and reporting of goodwill persists. The rejection of official accounting standards on goodwill is a common occurrence. A dynamic open system perspective is used in this paper to re‐examine the nature of goodwill. It is found that a meaningful economic interpretation can be developed for internally generated goodwill but not for ‘purchased goodwill’. There is an inability to identify the stream of benefits specifically associated with goodwill arising on acquisition.