Challenges in Estimating Goodwill in Current Financial Crisis

In recent decades is a significant change as a result of increasing importance of intangible elements. Technology development, particularly in technology transfer and communications, reduce cycle time and technological competition from the more pronounced are some elements that attract the attention of enterprises on ways to remain competitive. The essence of the ability of a person, a company or an entire company to generate wealth is primarily in the specific knowledge in its possession. The transition to IFRS based reporting has resulted in fundamental departures from many of the long accepted norms embedded in indigenous GAAP systems now superseded in IFRS adopting jurisdictions. The rules relating to goodwill accounting, measurement and reporting represent an excellent case in point, the traditionally dominant capitalize and amortise regime having been disposed of in favour of an impairment testing regime pursuant to which periodic amortisation charges are no longer required. The main goal of this paper is to analyse the problems concerning goodwill recognition and valuation of the goodwill in crisis period.