Non-additivity in accounting valuation: Internally generated goodwill as an aggregation of interacting assets
AbstractIn this paper we propose a new method to explain the creation and measure the value of internally generated goodwill (IGG). Our method is based on the idea that firm value is affected by interactions between assets used in combination to conduct business. This novel approach contrasts with the traditional additive approaches to valuing IGG, which assume assets are independent. We use Choquet capacities, i.e., non-additive aggregation operators, to explain the creation of IGG, and demonstrate from a sample of U.S. high technology sector firms that this model performs better than the traditional additive Ohlson model on accuracy in forecast enterprise value.
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Bibliographic InfoPaper provided by HAL in its series Post-Print with number halshs-00541525.
Date of creation: 20 Apr 2011
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Publication status: Published - Presented, European Accounting Association (EAA) 2011 annual meteing, 2011, Rome-Siena, Italy
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Internally generated goodwill ; Going concern goodwill ; Synergy ; Choquet integral ; Residual income model;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
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