The following article will guide you about how are goodwill impairment losses recognized. SFAS 142 – Goodwill and Intangible Assets: In SFAS 142, "Goodwill and Other Intangible Assets," July 2001, the FASB approved significant changes in the way income is determined for combined business entities. The most prominent of these changes is that goodwill is no longer amortized systematically over [...]
The main factors affecting the goodwill are as follows:- 1. Suitable Location of the Business 2. Managerial Skill 3. Nature of Business 4. Risk in Business 5. Favourable Contracts 6. Trend in the Profit 7. Possession of Patent and Trade Marks 8. Capital 9. Government Patronage 10. Other Factors. Factor # 1. Suitable Location of the Business: The place or [...]
In this article we will discuss about:- 1. Definition of Goodwill 2. Nature of Goodwill 3. Features 4. Need for Valuation 5. Accounting Treatment. Definition of Goodwill: Goodwill is a thing easy to describe, but very difficult to define. It is the benefit and advantage of good name, reputation and connection of a business. It is the attractive force which [...]