Managing impairment of goodwill

Abstract

Purpose

The purpose of this paper is to highlight the salient features of the new accounting standards on impairment of goodwill and their practical applications.

Design/methodology/approach

To ascertain the research gap, the existing literatures on the subject were critically reviewed and analysed. Objectives were set to identify the significant indicators of goodwill impairment. The areas covered include business combination and goodwill impairment, effects of new standards and current practices of goodwill impairment in the UK, etc.

Findings

Goodwill is a unique intangible asset in that its cost cannot be directly associated with any specifically identifiable item and is not separable from the company as a whole. Well planned strategies for preventing goodwill impairment with long‐term perspective would contribute fruitful results.

Originality/value

This study provides awareness to the readers about the strategies in dealing with goodwill impairment.

Citation

Seetharaman, A., Sreenivasan, J., Sudha, R. and Ya Yee, T. (2006), "Managing impairment of goodwill", Journal of Intellectual Capital, Vol. 7 No. 3, pp. 338-353. https://doi.org/10.1108/14691930610681447