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- Title
Accounting for Goodwill--a Study in Permissiveness.
- Authors
Gibson, Robert W.; Francis, Jere R.
- Abstract
This article focuses on the development of accounting in Australia. Goodwill on consolidation is the term used to describe the excess of the cost of investments in subsidiaries over the book value of the equity acquired. It has generated considerable discussion and diversity of opinion. In the U.S.A. Opinion No. 17 of the Accounting Principles Board has standardized the bookkeeping procedure involved. One of the chief criticisms of the current AICPA position is the rigidity and arbitrariness of universal, systematic writing-off of consolidated goodwill against consolidated profit. Flexibility is limited primarily to selection of the amortization period (two to forty years). The survey was intended to provide observations of current accounting practices relating to, or affecting goodwill on consolidation. For this reason this report does not attempt to assess the soundness of practices in use but concentrates simply on finding out what is done.
- Subjects
AUSTRALIA; ACCOUNTING; FINANCIAL statements; MARKET prices; RETAINED earnings; CORPORATION reserves
- Publication
Abacus, 1975, Vol 11, Issue 2, p167
- ISSN
0001-3072
- Publication type
Article
- DOI
10.1111/j.1467-6281.1975.tb00051.x