Javascript must be enabled to continue!

Return On Goodwill

Goodwill represents value not recorded until a company is purchased by another company. The value of goodwill comes from intangibles such as location, superior market position or the skill and learning of management. Goodwill is the difference between the purchase price of a company and the fair value of its assets. The residual nature of goodwill makes measurement of its contribution to performance difficult.  Two questions flow from this. The first is whether the contribution of goodwill is measurable. The second question is whether the contribution of goodwill varies from industry to industry. One way to measure contribution is return on assets.  This study analyses 38,519 years of company operations in 48 industries and compares the return of companies with and without goodwill. For some, but not all industries, return on assets for companies with goodwill was higher that for companies without goodwill.  The contributions of this study are to demonstrate whether goodwill contributes to performance and to analyze variability of performance by industry.

Clute Institute

David E. Vance

Journal of Applied Business Research (JABR)

2016

Title: Return On Goodwill

Description:

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.

5in 0pt;">Goodwill represents value not recorded until a company is purchased by another company.

The value of goodwill comes from intangibles such as location, superior market position or the skill and learning of management.

Goodwill is the difference between the purchase price of a company and the fair value of its assets.

The residual nature of goodwill makes measurement of its contribution to performance difficult.

Two questions flow from this.

The first is whether the contribution of goodwill is measurable.

The second question is whether the contribution of goodwill varies from industry to industry.

One way to measure contribution is return on assets.

This study analyses 38,519 years of company operations in 48 industries and compares the return of companies with and without goodwill.

For some, but not all industries, return on assets for companies with goodwill was higher that for companies without goodwill.

The contributions of this study are to demonstrate whether goodwill contributes to performance and to analyze variability of performance by industry.

.

Back

Hadoop distributed file system (HDFS) is the file system whereby Hadoop is use it to store all the upcoming data inside it. Since it been declared, HDFS is consuming a hug...

Whose Goodwill is it? The Taxation of Goodwill in Owner-Entity Transactions

Goodwill is a nebulous concept that is often not handled properly by taxpayers or the IRS. Two recent Tax Court cases highlight the IRS’s flawed approach and methodology to goodwil...

Borrowing Goodwill

The elusive intangible property right known as “goodwill” serves as the central organizing concept for trademark and unfair competition laws in the United States. It also plays an ...

Internal and External Drivers of Consumers’ Product Return Behaviors

Product return is a necessary part of the exchange process between companies and customers. It accounts for approximately 16% of total sales and a reduction in retailer / manufactu...

Verantwoording van goodwill bij overnames: purchased goodwill dan wel full goodwill

In verband met de in de toekomst geldende IFRS 3 – naar verwachting ingaande 1 januari 2009 – waarin naast ‘purchased goodwill’-verantwoording ook ‘full goodwill’- verantwoording...

Valuation of Goodwill for an Engineering Firm

The concept of valuing personal and enterprise goodwill is a study in the art of quantifying subjective values. Sellers strive to maximize goodwill, while buyers strive to minimize...

The Goodwill Model of the Competitive Market (Das Goodwill-Modell des Wettbewerbsmarktes) (German)

Consumers often cannot judge the quality of goods and services at the time of the purchase decision. The goodwill model explains how the market participants deal with this problem....

Determinants of Goodwill Impairment: International Evidence

This study investigates the determinants of firms’ decision to impair goodwill under IFRS. Our empirical analysis is based on data for the years 2005 to 2011 for 8,110 non-financia...

Email:
Password:

Email:

Return On Goodwill

Related Results