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A Study on the Value Relevance and Reliability of Goodwill

Author: TuLin
Tutor: LiShiXin
School: Chongqing University
Course: Accounting
Keywords: Goodwill Value relevance Reliability Operating activities Market value
CLC: F275
Type: Master's thesis
Year: 2010
Downloads: 367
Quote: 3
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Abstract

Mergers and acquisitions have become an important way for the rapid expansion of modern enterprise, plays a crucial role in the development of enterprises. Goodwill associated with the business combination has been the hot topic of the accounting practitioners and theorists argue. With the growing goodwill proportion of corporate assets, proper reporting and disclosure of goodwill on the information about the user's decision-making plays a very important role. However, the recognition, measurement of goodwill formed in the merger accounting standards has not been able to reflect the long-term \the accounting treatment of goodwill model made substantive provisions. So, whether the goodwill of the enterprise value relevance? New goodwill accounting standards and also enhance the value of goodwill related to sex it? From the two aspects of the impact of the goodwill of the business activities and corporate market value of the quotient The reputation of the value of the correlation. Meanwhile, the reliability of the goodwill. In terms of goodwill and business activities, this study found that the goodwill of 2004-2006 did not affect the main business profit, 2007-2008 goodwill with the main business profit significantly positive correlation value of the correlation. This shows that the new goodwill accounting standards, improve the relevance of the value of goodwill. Discard the the 2004-2006 sample group goodwill is not significant, further carved out the existence of goodwill samples and provision for goodwill impairment of samples in the sample group from 2007-2008. The two sets of sub-sample test results indicate that goodwill has a significant positive value of correlation. Correlation study of the value of goodwill and enterprise market, 2004-2006 goodwill has no effect on the market value of the enterprise, 2007-2008 goodwill value relevance, indicating that the new accounting standards on goodwill changes to improve the relevance of the value of goodwill. On this basis, the paper further 2007-2008 goodwill reliability test results underestimated the extent that the carrying value, the carrying amount of goodwill in the capital market, the value of about $ 7. Existence of goodwill sample test results are consistent with the results of the 2007-2008 sample group. However, for the sample companies in terms of the provision for goodwill impairment of its goodwill no longer has a positive value of the correlation, but a negative correlation with the company's market value, and the impairment of goodwill has nothing to do with the market value. Overall, the findings of the paper that no matter from business activities or enterprises market value, goodwill under the old accounting standards do not have the value relevance of goodwill under the new accounting standards have value, this show that the change of the new accounting standards on the treatment of goodwill, the goodwill value of the correlation. In addition, the paper's findings also indicate that the carrying value of goodwill under the new accounting standards significantly underestimated, does not have the value of reliability.

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