Goodwill Accounting in Selected Countries and the Harmonization of International Accounting Standards

Economic and financial markets interpenetrate and national economies are increasingly interdependent. This results in a growing need for comparability of accounting procedures internationally. Accounting for goodwill illustrates this phenomenon. By specifying the recommended asset treatment for purchased, positive goodwill, and the five‐year amortization period, IASC has taken a significant step towards harmonization of goodwill accounting. As noted in the article, however, the implications for consolidated income may be quite drastic. This is especially so with respect to the implications of the revised IAS 22 (following IAS ED 32) for potential leveraged corporate buy‐outs.