RESUMO DO TRABALHO

Código: 113

Área Temática: Contabilidade Aplicada para Usuários Externos

Título: Accounting For Goodwill: Benefits, And Advantages Of The Good Name, Reputation And Connection Of A Business On Horizon Of Time For Innovation

Resumo:
1 – Objective: This paper is motivated by the controversy surrounding the regulation of accounting for goodwill and the limited evidence regarding the determinants of the discretionary accounting treatment of goodwill. Firms faced a trade-off between their incentive to maximize the recognition of tangible assets to strengthen balance sheet ratios and their incentive to recognize goodwill to improve post acquisition profits. 2 – Methodology: Regression models to measure the proportion of purchase price allocated to goodwill that is negatively associated with the leverage of the acquiring company and the size of the acquisition, this explain the negative relation between the recognition of goodwill and leverage as being driven by the incentives of highly levered firms to opportunistically improve their balance sheet position. So management is able to maximize the assets available to secure future debt by recording a greater proportion of the purchase price as tangible assets. The explanation offered for finding that larger acquisitions are more likely to result in the recognition of lower goodwill balances is based on the premise that, the more material the acquisition is to the acquiring firm, the greater the exposure to the risk associated with the acquisition. 3 – This preliminary results: provides management with an incentive to recognize a greater proportion of tangible assets to provide greater assurance to shareholders of the availability of security, should the target firm fail, and that “aged” goodwill is not considered to be an asset by investors. So innovation is a total priority.