Peeling away financial reporting issues one layer at a time

Category for Intangibles – Goodwill & Other

The Asset Impairment Song and Dance (Part 2 of 2)

My latest post was about general problems with asset “impairment” accounting —  its absurdity, high cost and dubious information value.  And I haven’t even begun to hone in on the wurst part: goodwill impairment.

It is [Read More...]

Caterpillar: Another Sad Example of Bad Goodwill Accounting

After having just written a post on HP’s massive write-off of goodwill, I am reluctant to keep on banging the drum of how bad goodwill accounting can be.  But, I can’t resist following up on [Read More...]

“Goodwill Impairment” Accounting Could Become Less Costly – and Earnings Management a Lot Easier

When you start with a bogus asset like goodwill (itself a misnomer), it's hard to find quality in the rules that govern its measurement. The root of the problem is that business combination accounting [Read More...]

Is GM’s Equity For Real?

GM's recent filing of its registration statement with the SEC represents the collision of two topics I have written about. First, the fortuitous arrival of $30.2 billion of "goodwill" on GM's balance [Read More...]

Goodwill Impairment: I Love a Charade

I have written about initial recognition of goodwill on numerous occasions. I suppose it might be less bothersome if goodwill had the good grace to sit and stay like a good dog [Read More...]

A Sampling of What Lurks at the Bottom of the Goodwill Garbage Heap

I have already reported stumbling upon a fascinating interview of Clarence Sampson, SEC Chief Accountant for more than a decade starting in the mid-1970s. Of his many tales of peculiar interactions [Read More...]

FAS 52: Another Goodwill Charade, and IFRS Convergence To Boot

In a recent post, I argued that goodwill arising from a business combination was just a random number; therefore, any attempt to measure impairment amounted to nothing more than a costly charade.  By [Read More...]

What Good Comes from Goodwill Accounting?

In an earlier post, I described how SFAS 141R resulted in some incremental improvements to the accounting for business combinations.  However, warts remain, and the purposes of this post is describe the ugliest [Read More...]

Peeling the Onion on the New Business Combination Standards: FAS 141R and FAS 160

This post examines the onion skin, if you will, of the new business combination standards. I'm going to explain the differences between the so-called 'purchase' method of accounting and the new 'acquisition' method. As [Read More...]