The reduction in the carrying amount of goodwill: an analysis in light of the IASB’s Discussion Paper/2020/1

Authors

  • Larissa Costa Universidade de Brasília https://orcid.org/0000-0002-5528-1677
  • Paulo Roberto Barbosa Lustosa Universidade de Brasília
  • Jorge Katsumi Niyama Universidade de Brasília

DOI:

https://doi.org/10.17524/repec.v17i1.3121

Keywords:

Goodwill, Contabilização posterior, Impairment, IASB

Abstract

Objective: This paper aims to perform a comparative analysis of different ways to reduce the carrying amount of goodwill in light of the IASB’s Discussion Paper/2020/1.
Method: This research is a theoretical essay that highlights the view of the literature and accounting standards on the subject.

Results and contributions: Based on the stakeholders’ claims towards the IASB, the impairment test, the current goodwill reduction method, has several limitations, such as high cost, late recognition, and shielding effect. The reflection presented here proposes that the permanence of this test as the only form of subsequent goodwill accounting implies a reduction in the quality of accounting information. Therefore, other reduction forms are recommended to represent the figures in the financial statements more faithfully. Thus, given the current opportunity provided by the IASB to discuss the subject, this paper’s relevance lies in timely addressing the discussion alluding to Discussion Paper/2020/1 of what are the potential and most appropriate ways to reduce the carrying amount of goodwill in order to represent the equity of companies in a more relevant and reliable manner.

Author Biographies

Paulo Roberto Barbosa Lustosa, Universidade de Brasília

Graduado em Engenharia Civil (FTESM, 1981) e doutor em Contabilidade e Controladoria (USP, 2001). Visiting Scholar (UIUC-USA), 1999-2000 e 2017-2018. Professor titular na UnB, foi coordenador de graduação, chefe do Departamento de Ciências Contábeis e Atuariais e coordenador-adjunto do Programa de Pós-Graduação em Ciências Contábeis UnB, UFPB e UFRN.

Jorge Katsumi Niyama, Universidade de Brasília

Possui graduação em Ciências Contábeis pela Fundação Escola de Comércio Álvares Penteado (1974), mestrado em Controladoria e Contabilidade pela Universidade de São Paulo (1982) e doutorado em Controladoria e Contabilidade pela Universidade de São Paulo (1990) e pós-doutorado pela University of Otago (2005).

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Published

2023-03-31

How to Cite

Costa, L., Roberto Barbosa Lustosa, P., & Niyama, J. K. (2023). The reduction in the carrying amount of goodwill: an analysis in light of the IASB’s Discussion Paper/2020/1. Journal of Education and Research in Accounting (REPeC), 17(1). https://doi.org/10.17524/repec.v17i1.3121

Issue

Vol. 17 No. 1 (2023): Jan - Mar

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