Purchase Instant Access. View Preview. Learn more Check out. Abstract This article provides a means of resolving one of accounting's ongoing problems—how to account for goodwill in an era where the unidentifiable intangible asset is often an entity's largest value component. Citing Literature. Volume 45 , Issue 3 September Pages Related Information.
Close Figure Viewer. Browse All Figures Return to Figure. Previous Figure Next Figure. Email or Customer ID. Forgot password? Old Password. New Password. Password Changed Successfully Your password has been changed. Descriptive approach emphasizes that accounting is a practical thing. It is influenced by the behavior of individuals and classes that exist within or outside the organization.
As to better understand, the accounting practices need to be a descriptive approach. Critical approach emphasizes critical awareness to develop and evaluate alternative paradigms and methods that combine a variety of accounting interests.
Although there has been a shift in accounting, accounting goodwill still insists on the principle of historical value. Based on historical accounting concepts, we argue that in this era, goodwill valuation approach is done by the Income Statement approach. Measurement and valuation of goodwill is mainly aimed to make the allocation of the historical value of the company, either by technique of amortization of assets or by technique of impairment of goodwill. As revealed by Riduwan et al. Therefore, the sign of goodwill is also just a reality of existence or being real.
Era of Globalization The third era is the era of globalization, where accounting attempted to be globally standardized with the implementation of International Financial Reporting Standards IFRS. The creation of global harmonization of accounting standards is also one of the objectives and commitments of the G in enhancing the cooperation of the world economy.
Global standards enable the comparability and exchange of information.
www.cwellspainting.com/includes/app/5020-phone-spy.php IFRS convergence may enhance the information of the financial statements of companies in Indonesia. Adoption of international standards is also very important in order to stabilize the economy.
The benefits of IFRS convergence program is expected to reduce investment barriers, improve corporate transparency, reducing costs associated with the preparation of financial statements, and reduce the cost of capital. The goal of financial statements prepared by the IFRSs will only require a bit of reconciliation to produce financial statements.
From here, it seems that adoption of IFRS did not see the factual reality of the situation and conditions in Indonesia, but rather look at globalization simulacra is it possible that many countries with its cultural, community, social interaction, legal, and others be made uniform? Unfortunately, there is no research about whether harmonization or adoption of IFRS is in accordance with local cultural and spiritual values in Indonesia.
There is also no reasearh evidence that could prove that Indonesia is necessary to adopt IFRS the reality of Indonesia. The main principle of the background for IFRS is a principle of comparability and uniformity with emphasis on the approach to fair value fair value accounting.
Routledge Studies in Accounting The series examines research in accounting thought, practice, auditing, principles . Accounting for Goodwill book cover. Buy Accounting for Goodwill (Routledge Studies in Accounting) 1 by Andrea Beretta Zanoni (ISBN: ) from Amazon's Book Store. Everyday low.
Such measures better reflect the present financial state of reporting entities and better facilitate assessing their past performance and future prospects. In that regard, the Board does not accept the view that reliability should outweigh relevance for financial statement measures. The difference between the cost of the business combination and the fair value of the assets and liabilities acquired represents goodwill IFRS 3.
Goodwill is not subject to amortisation, but is assessed for impairment at least annually IFRS3. Impairment is charged to the income statement IAS Beams et al. With this calculation, the value of goodwill will be larger than the measurement of goodwill in the previous era Rp This makes the company's assets to be larger and the potential impairment of goodwill will significantly would reduce corporate profits.
At this time, the entity theory is emphasized in the new corporate entity, although in reality legally the new entity does not exist. Based on the new entity theory and principles of relevance, we argue that accounting goodwill in this era of emphasis on the balance sheet approach, in which the accountant seeks to provide information about the company's assets at balance sheet date not the historical value of the property companies.
It appears that in this era, the object goodwill is no longer a reflection, counterfeiting, or analogies of the original item, but only an imitation of a mass production global. Forms of companies in the future no longer looks real mortal and brick but rather in virtual form form of company in cyberspace.
Information and communication technology revolution has eliminated national borders, time and space to interact and communicate with each other to form a global community. Technological development has also brought a lot of change, especially in transaction activity.
Flow of goods and services not only through the customs area from one country to another, but also through electronic transfer virtual. Consumers can purchase goods easily through the internet, and in a short time to hand the goods. Trading in the virtual world known as e-commerce has the potential to be one of the largest wheel drive economic development in the future. In addition, the traffic cash payments as an instrument to assess the transaction will also undergo radical change.
Money no longer seem real paper form , but transformed into another form of the electronic money e-money. E-money can be formed as card-based product and software based product Suryaningrum and Hastuti, E-money in the form of card-based products is often referred to as electronic purses, which are principally intended for direct payment face to face.
While software based product is often, called digital cash, in principle, is an application software is installed into a Personal Computer PC that runs with the standard operating system that was developed to conduct transactions via a computer network internet. The concept is to apply the principles used in bookkeeping process in which each transaction shall be treated as the debit or credit which would then affect the outstanding balance contained in the e-money. In this era, simulation occurs, there are indications that the signs are no longer directly refer to a reference referent , or that the sign is no longer a forgery of a specific reference, or sign does not absorb or dominate an object, but purely a sign reflecting the sign itself pure simulacra.
The Company is no longer a referent of the company, and money is no longer the referent of money. As a result, the value of goodwill as a form of company will be very difficult to be measured and assessed considering the company itself exists only in cyberspace virtual. Thus, the important question remains: is it still necessary to have the accounting goodwill in the future? On the study of accounting goodwill, I use the perspective Baudrillarian order of simulacra, and concluded that accounting goodwill were divided in four era: 1 the era of ownership proprietorship , 2 the era of production political economy , 3 the era of globalization, and 4 the virtual era.
In the earlier era, the accounting of goodwill still represent a reality of accounting transaction, but along with the development of social, business, technology in accounting transactions, this concept of goodwill has been changed. Goodwill seems to represent the hyperreality of accounting transaction. Review of goodwill accounting in this essay is limited to literature study and our own interpretation, so it needs further study with a variety of paradigms such as Interpretive, critical, or postmodernists.
Beams, F. Anthony, R.
Clement, and S. Lowensohn, Translated, penerbit Salemba Empat. Boediono, Sambutan Gubernur Bank Indonesia. Chariri, A. Hedro, Cooper, D. Sherer, Evans, L. Observation on the changing language of accounting, Accounting History International Conference, February, accessed 8th October Van Breda, Accounting Theory, fifth edition, Ricard D. Irwin, Inc. Shearer, D. Thornton, and M. Welker, Riduwan, A. Triyuwono, G. Irianto, and U. Ludigdo, Santoso, Listiyono, dkk. An index value exactly equal to 1 indicates neutrality in comparison with US GAAP with respect to the effect of accounting standards.
The overall index of comparability was measured and tested for each of the five years, taking each year separately in order to obtain a view of the impact on reported fundamental accounting variables on a year by year basis. We analysed the index by country, industry and size.