HOW IS THE DEVELOPMENT OF GOODWILL ACCOUNTING IN INDONESIA?

Abstract

Goodwill arises when one company combines business with another company. Acquisition expenditures that exceed the fair value of net assets are recognized as goodwill on the statement of financial condition. This study seeks to give information on the evolution of the evaluation of goodwill in accounting following modifications to the rules that govern the assessment and measurement of goodwill. The research approach used in this paper is qualitative, with data sources derived from a scoping evaluation of past research on goodwill. This study reveals that legislation governing goodwill has changed multiple times, and goodwill is now regarded as wealth acquired due to a corporate merger. Goodwill must be evaluated for impairment on an annual basis. This research is expected to contribute to the literature on goodwill under the standards imposed by financial accounting literature or academic scholars.