Goodwill Impairment Research Paper Example | Topics and Well Written Essays - 750 words

Goodwill Impairment - Research Paper Example However, there are several noticeable differences in the two accounting approaches as listed below: In the context of allocation of Goodwill, allocation is done to an operating unit in case of U.S. GAAP. In IFRS language, its allotment is done to a small group of assets that generates flow of cash and such unit has to be smaller than the operating segment of a company. In the context of the recognition of the loss of impairment, the US GAAP considers such a case if the implied fair value exceeds the amount for carrying of a particular reporting unit and the amount for carrying of the goodwill (Alexander & Britton, 2004). It is a two step approach. On the other hand, in case of IFRS, which follows a one step approach, weigh cash generating unit’s amount carried against the amount that can be recovered. Impairment of loss is spotted when the former is greater than the latter. In US GAAP parlance, the loss of impairment is the amount of difference between the carried amount of go odwill and the reporting unit’s fair value that is implied. In terms of IFRS, it is the amount the former exceeds the amount that can be recovered. The loss thus arisen would be provisioned for Goodwill impairment until the latter is zero. Pros and cons of measuring Goodwill Impairment The measurement of goodwill has several positives aspects to it. If the process is undertaken with precision and accuracy, it will provide helpful information about the net worth for the investors of the company. If the financial information is overstated then it provides a wrong idea about the future to the manager across other departments and hence they would take wrong decisions. Hence an accurate measurement would help the other departments as well. The disadvantages of measurement is that if there is too much goodwill for a company to write off then it sends a negative impression to the investor about the management that they have records of taking wrong decisions. Often the determination of the fair value of goodwill is not disclosed by the company and hence there is ample scope for manipulation which can have its effect on the bottom line. There are various models that can be used for measuring of goodwill impairment and there is difference in opinion among expects regarding which method is to be taken. Hence depending on the method the value could vary. There is also another problem of separation of goodwill at the time of acquisition of a company and the total value of goodwill post acquisition. How convergence should work and why Though having several basic differences, the IASB and FASB should aim at convergence of the two standards with an aim to achieve a superior global standard of accounting. Both of them should work in harmony in areas like insurance and financial instruments. The reversal of the loss of impairment is prohibited in both U.S.GAAP and IFRS. In areas of offsetting of balance sheet they could not be of the same opinion. However they achieved s uccessful convergence in areas like disclosure norms which would help them in the reconciliation of the differences in requirements for offsetting. Convergence is necessary for Unites States as well as the world because it would affect areas of leasing and revenue as well. The American Companies also need to look upon certain issues relating to it. For example, some nations have already adopted the IFRS standards and the subsidiaries of the MNCs that are there in those countries have to

Show Dont Tell and Leads and Conclusion Essay Example | Topics and Well Written Essays - 250 words

Show Dont Tell and Leads and Conclusion - Essay Example Showing: Slowly, I browsed through the editorial page of the newspaper. The freshness of the ink and paper began to permeate my nostrils as I let my eyes wander over the lines that initially caught my attention. I felt a bit of agitation from inside me as I quietly read the sharp contrast of the quotes between the Republican and Democratic parties. The Republican reaction appealed more to my logic. They seemed to be created from an impartial reasoning fused with tact and conciseness. In contrast, the Democratic reaction felt as if they were aimed at me personally. That is how offensive they sounded. Original: It was time for the announcement of results. The administrator began announcing the results. Results were being announced in the order of seniority. So my turn was after the announcement of results for the fifth and the fourth grade. It did not take the administration long to announce the result of the senior batches, and it was the turn of third grade. Suddenly, I heard my name. The administrator had requested me to come up to the stage. The speaker had a trophy with a green ribbon on it in his hand. I was stunned, and tottered up to the stage in huge amazement. Oh! It was really for me. I had the time of my life. The silver shine gleamed in the sunlight and was a reflection of my joy. I had stood third. I had a green trophy in my hand. It was the first trophy of my academic career and opened the doors for many more to follow. First conclusion: It was time for the announcement of results. The results were announced in order of seniority. The third grade’s turn came after the announcement of results for the fifth and fourth grade. I know I did not stand a chance for my coveted award. I had been sick for the better part of the school year and my grades suffered a lot. I looked at my parents and saw in my mom’s eyes a look of understanding. She