uu.seUppsala University Publications
Change search
ReferencesLink to record
Permanent link

Direct link
Defining goodwill: a practice perspective
Department of Management, University of the Marche, Ancona, Italy.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2011 (English)In: Journal of Financial Reporting & Accounting, ISSN 1985-2517, Vol. 9, no 2, 161-175 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to identify a definition of goodwill related to how companies describe their purchased goodwill. It focuses on whether there is any consistency in how firms define goodwill in practice in the first year of mandatory application of International Financial Reporting Standards 3 (IFRS3).

Design/methodology/approach – The paper builds on an analysis of how companies describe goodwill in purchase analyses related to company acquisitions. The empirical body of this study is represented by the financial statements of Italian and Swedish listed companies.

Findings – The overall finding of this investigation is that, in practice, the concept of goodwill is unclear and therefore there is no reference to one singular definition of goodwill. Moreover, in spite of the idea underlying IFRS3, goodwill still appears to be a "black box", wherefore an accounting inertia is highlighted.

Research limitations/implications – The main limitation of this study is that only a sample of firms (those listed on the Stockholm Stock Exchange and the Milan Stock Exchange) that apply IFRS3 is investigated. The main implication of this paper is that it is possible to identify some general classes of descriptions, but these remain vague. Therefore, some accounting policy suggestions are proposed.

Originality/value – First, this paper focuses on a definition communicated by firms, which is different from most other studies, as they tend to focus on a theoretical definition of goodwill. Second, this paper focuses on a goodwill definition in practice, whereas studies of goodwill practice mainly concern impairment testing.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited , 2011. Vol. 9, no 2, 161-175 p.
Keyword [en]
Accounting standards, Business combination, Financial accounting, Goodwill, Intangible assets, International Financial Reporting Standards, International standards
National Category
Business Administration
Research subject
Business Studies
URN: urn:nbn:se:uu:diva-161112DOI: 10.1108/19852511111173112OAI: oai:DiVA.org:uu-161112DiVA: diva2:454520
Available from: 2011-11-07 Created: 2011-11-07 Last updated: 2011-11-16Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text
By organisation
Department of Business Studies
In the same journal
Journal of Financial Reporting & Accounting
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 239 hits
ReferencesLink to record
Permanent link

Direct link