Good Will Come of Goodwill, But Accounting Depends

Mark V. Hogan, CPA, and Linda J. Matuszewski, PhD, CPA

In BriefThe intangible asset goodwill can be one of the largest items on a company's balance sheet, and one of five sets of standards may be applied to account for it. The resulting complexity is a challenge for CPAs who are preparing and auditing financial statements, users who are analyzing them, and educators and students who are teaching and learning accounting standards. This article looks across the spectrum of standards—U.S. “Big GAAP,” the new U.S. “Little GAAP,” IFRS, IFRS for Small- and Medium-sized Entities (IFRS for SMEs), and the AICPA's Financial Reporting Framework (FRF) for SMEs—focusing on how the accounting for goodwill differs across the dimensions of initial measurement, amortization, and impairment.