The proposed goodwill impairment test - implications for preparers, auditors and corporate governance

Dagwell, Ron, Windsor, Carolyn and Wines, Graeme 2004, The proposed goodwill impairment test - implications for preparers, auditors and corporate governance, in 4th OneDay Symposium on Accountability, Governance and Performance in Transition Proceedings, Griffith Business School, Dept of Accounting, Finance & Economics, Griffith University, Nathan, Qld., pp. 1-14.

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Title The proposed goodwill impairment test - implications for preparers, auditors and corporate governance
Author(s) Dagwell, Ron
Windsor, Carolyn
Wines, Graeme
Conference name One Day Symposium on Accountability and Performance (4th: 2004: Brisbane, Queensland)
Conference location Brisbane, Queensland
Conference dates 20 February 2004
Title of proceedings 4th OneDay Symposium on Accountability, Governance and Performance in Transition Proceedings
Editor(s) Windsor, C. A
Publication date 2004
Start page 1
End page 14
Publisher Griffith Business School, Dept of Accounting, Finance & Economics, Griffith University
Place of publication Nathan, Qld.
Summary Accounting for goodwill is again controversial as Australia adopts international accounting standards from 1 January 2005. The current method of accounting for goodwill will change dramatically as detailed in the AASB's E0109 and IASB's E03. Goodwill acquired in a business combination will no longer be amortised but rather goodwill will be tested for impairment annually (E03, para 54). This paper explores the potential impact of the proposed changes to goodwill accounting for preparers, auditors and those involved with corporate governance. We compare and discuss the current goodwill treatment and the proposed treatment of goodwill, demonstrating the advantages and complexities of the proposed treatment for preparers and auditors. Auditors will be required in many instances to use their professional judgment and rely on managements' abilities and integrity as well as sound corporate governance mechanisms (such as audit committees) in auditing the 'fair' valuation of goodwill and associated transactions. This paper raises the issues and challenges that preparers, independent auditors and those involved in corporate governance will face with the introduction of the new treatment for goodwill accounting.
Language eng
Field of Research 150103 Financial Accounting
HERDC Research category E1 Full written paper - refereed
Copyright notice ©2004, Griffith University
Persistent URL http://hdl.handle.net/10536/DRO/DU:30009628

Document type: Conference Paper
Collection: School of Accounting, Economics and Finance
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