Abacus Volume 29 issue 1 1993 [doi 10.1111%2Fj.1467-6281.1993.tb00423.x] GRAEME WINES; COLIN FERGUSON -- An Empirical Investigation of Accounting Methods for Goodwill and Identifiable

8/9/2019 Abacus Volume 29 issue 1 1993 [doi 10.1111%2Fj.1467-6281.1993.tb00423.x] GRAEME WINES; COLIN FERGUSON -- An Empirical Investigation of Accounti

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ABACUS, Vol.29

No. 1,

993

GRAEME WINES AND COLIN FERGUSON

An Empirical Investigation of Accounting

Methods for Goodwill and Identifiable

Intangible Assets: 1985 to 1989

Accounting for intangible assets represents one of the more controversial

accounting standards issues.

This

study examines the accounting policies

adopted for goodwill and for identifiable intangible assets by

a

sample

of

150

Australian Stock Exchange listed companies over the five-year period

1985 to 1989 inclusive. Findings reveal a general decrease in the diversity

of goodwill accounting policies over the study period but the converse

for identifiable intangible policies. In particular, an increase in the

percentage of companies electing not to amortize identifiable intangibles

was found. The study provides evidence to support claims that companies

have been recognizing identifiable intangibles to reduce the impact on

reported operating profits

of

the requirement of accounting standards for

the amortization of goodwill.

Key

words: Accounting Policies; Goodwill; Identifiable Intangible Assets,

Accounting for intangible assets is one of the more controversial issues to be addressed

in accounting standards. For example, Miller and Carnegie 1990, p. 48) believe

that achieving a consensus on a set of accounting standards

for

intangible assets

appears to be virtually impossible.

The Australian Accounting Research Foundation AARF; 1989, p. 5 defines

intangible assets as non-monetary assets without physical substance and

identz3able

intangibles as those which are capable

of

being both individually identified and

specifically brought to account. Examples of

identifiable

intangible assets include

brand names, copyrights, franchises, intellectual property, licences, mastheads,

patents and trademarks.

The term goodwill is generally used as a collective description

of

unidentified

intangible assets Henderson and Peirson, 1984, p.

302).

In practice, goodwill is

typically recognized

as

the difference between the price paid for a business and

the sum of the valuations of its identifiable assets less the sum

of

its liabilities.

Accounting for goodwill and for identifiable intangible assets are interrelated,

and this study examines both issues in parallel. The objective of the study is to

examine the financial statements of a sample of 150 Australian Stock Exchange

G RA E M E INES s a Lecturer and COLIN

ERGUSON

s a S enior Lecturer in Acc ounting, De akin University,

Victoria.

The authors wish to thank Garry Carnegie, Ian Zimmel and two anonymous reviewers for their

comments on earlier drafts of this paper.

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G O O D W I L L A N D I D E N T I F I A B L E I N T A N G I B L E A S S E T S

listed companies over the period 1985 to 1989 to ascertain any trends in accounting

policies adopted for goodwill and identifiable intangibles. This enables the

interrelationship between these accounting policies to be investigated.

BACKGROUND

The first Australian accounting standard issued relating specifically to intangible

assets albeit only to goodwill) was Statement of Accounting Standards AAS 18,

Accounting

for Goodwill ASA ICAA, 1984) which was issued in March 1984

to operate for accounting periods ending

on

or after 31 March 1985. Australian

companies had previously adopted a wide variety of accounting treatments for

goodwill see, for example Standish, 1972; Miller, 1973; Gibson and Francis, 1975;

Goodwin, 1986b; Kirkness, 1987). Gibson and Francis concluded that this complete

permissiveness or flexibility is seen to result in chaos 1975, p. 171).

Perhaps the most controversial provision of AAS 18 is the requirement for the

systematic amortization of goodwill over the time during which the benefits are

expected to arise. This period should not exceed twenty years para. 40). To minimize

the impact of this requirement

on

reported operating profits, many companies

eliminated or reduced their goodwill balances in the period before the standard

became operative Kirkness, 1987, p. 51). This was achieved by various methods,

including direct write-offs or by reallocations to, and revaluations of, other assets.

AAS 18 has also been attacked on the grounds of its subjectivity. For example,

Henry Bosch, then chairman of the National Companies and Securities Commission

NCSC), argued that accounting diversity remained and that, as a result, there

was scope for creative accounting and deliberate manipulation of figures cited

in Kirkness, 1987, p. 49). Goodwin 1986a, p. 41) argued that In view of the subjec-

tivity involved, management effectively is permitted to write off goodwill whenever

it desires. Although the introduction of the goodwill standard increased the number

of Australian companies systematically amortizing goodwill, there was still a signi-

ficant degree of non-compliance see, for example, Carnegie and Gibson, 1987;

Kirkness, 1987; Williams and Carnegie, 1989). It required the introduction of ASRB

1013 for compliance to be more effectively enforced. This approved accounting

standard has statutory backing and applies to companies reporting in financial

periods ending after 18 June 1988.

With the advent of the ASRB goodwill standard it again became obvious that

many companies sought to minimize the impact of the requirement for the

amortization of goodwill. Primarily, this was achieved by recognizing identifiable

intangible assets, thereby reducing the amount that would otherwise have been

recorded as goodwill. For example, Walker 1989, p. 10) refers to companies that

have written up identifiable intangibles ostensibly to tell the truth about the existence

I See, for example, Goodwin and

Harris

1991).

Also, s an indication

of

increased com pliance , Carnegie

and Gibson June 1992 using a mail survey approach found that a greater percentage of company

respondents indicated the adoption

of

policies more consistent with the requirements

of

AAS

18

and ASRB 1013 than was the case w ith an earlier survey when only

AAS

18 was applicable.

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A B A C U S

of valuable assets, but notes that Privately, many practitioners concede that the

main motive was often to avoid the approved standard ASRB 1013. Woolf 1989,

p. 32) observed similar practices in the United Kingdom.

One of the slickest solutions.. has been

to

take legitimate advantage of the standards

criterion

for

distinguishing goodw ill from other intangibles. The trick, therefore, is to

allocate as much as possible

of

the difference between the price paid

for

an acquisition

and the separable net assets acquired i.e ., goodwill) t o . . bespoke intangibles.

In response to this practice, the AARF issued Accounting Guidance Release

No.

5

AGR 5; 1985), which draws attention to the fact that these intangibles, in accordance

with AAS 4,

Depreciation of Non-Current Assets

are required to be written off

by systematic charges to the profit and loss account over the period of time during

which benefits are expected to arise AGR 5, para

3).

Nevertheless, widespread

non-compliance continued see Carnegie and Kallio, 1988; Goodwin and Harris,

1991). Also, in what has been referred to as the intangible mirage, some companies

have written off identifiable intangibles

as

extraordinary items after having received

third-party valuations Carnegie and Gibson, 1989), a practice seemingly aimed

at reducing or eliminating any necessity for current and future amortization charges

against operating profit.

In an attempt to develop an accounting standard on identifiable intangibles, the

AARF issued an exposure draft in August 1989 ED 49; 1989). This draft advocated

that recorded identifiable intangibles be amortized to the profit and loss account

over a finite period para.

40 .

The commentary stated that when making assessment

in prospect few assets could be expected to provide benefits over

a

period in excess

of twenty years para. xi). However, reflecting the controversial nature of the drafts

contents, the AARF has announced that ED 49 has been withdrawn in view of

the lack of consensus on the subject at national and international level 1992, p. 1).

The Chairman of the Business Council of Australias Accounting Standards

Working Group reflected the business communitys concern when he stated that

It is apparent that the inter-related issues of goodwill and intangibles need to be

given much more attention and that accounting bodies should not ignore the concern

that exists in the business community in this regard Brass, 1989, p.

66 .

THE STUDY

While the issues of accounting for goodwill and for identifiable intangible assets

are inter-related, most of the studies investigating the accounting procedures adopted

by Australian companies for goodwill and identifiable intangibles, have focused

on only one or other of these issues. This study examines both issues in parallel.

The financial statements of a sample of Australian Stock Exchange listed

companies are examined to investigate the inter-relationship between the accounting

policies adopted for goodwill and for identifiable intangibles. These policies are

reviewed for the five-year period 1985 to 1989 inclusive. This enables a longitudinal

approach over the period in which AAS 18, AGR 5 and ASRB

1013

have been

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G O O D

W I L L

A N D I D E N T I F I A B L E I N T A N G I B L E A S S E T S

operative. The final year 1989) was chosen to eliminate any possible effects of

ED 49.

A

sample of 150 companies listed

on

the Australian Stock Exchange during the

period 1985 to 1989 inclusive by reference to their financial-statement balance dates)

was randomly selected and their financial statements for each of those years were

used

s

the basis for the study.

The general research objective was to examine the financial statements of a sample

of

companies over a five-year period to ascertain any trends in accounting policies

adopted for goodwill and identifiable intangible assets. In particular, for the period

1985-1989 the following questions were addressed:

What has been the trend in the incidence with which companies have been reporting

goodwill and identifiable intangible assets?

Has there been a change in the accounting policies adopted for goodwill over

the research period? It would be expected that, with the introduction of

A A S

18

and ASRB 1013, there would have been an increased adoption of policies consistent

with those standards. Thus:

H1: Over the period 1985 to 1989,

an

increasing percentage of companies reporting

goodwill adopted, for that goodwill, the accounting policy of capitalization and

systematic amortization.

Has there been a change in the accounting policies adopted for identifiable

intangible assets? Conditional on companies recognizing identifiable intangibles in

an effort to reduce the impact on reported operating profits of the requirements

of

A A S

18 and

ASRB

1013 for the amortization of goodwill, it would be expected

that a decreasing percentage of companies reporting identifiable intangibles would

have adopted the accounting policy of capitalization and systematic amortization.

Thus:

H2:

Over the period 1985 to 1989, a decreasing percentage of companies reporting

identifiable intangible assets adopted, for those intangibles, the accounting policy

of capitalization and systematic amortization.

As a joint test regarding goodwill and identifiable intangible accounting policies,

it would be expected that there would be a decrease in the incidence of companies

not amortizing or writing-off goodwill

as

operating expenses while there would

be an increase in the incidence of companies not amortizing or writing-off identifiable

intangibles as operating expenses. Thus:

H3: Over the period 1985 to 1989, the number of companies not amortizing/ writing-

off goodwill as operating expenses is inversely related

to

the number

of

companies

not amortizing/ writing-off identifiable intangible assets as operating expenses.

STUDY FINDINGS

Incidence of Companies Reporting Goodwill and Identifiable Intangibles

Table

1

presents summary statistics showing the number of sample companies which

recognized goodwill and/ or identifiable intangibles in their financial statements for

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A B A C U S

TABLE

RECOGNITION OF GOODWILL AN D IDENTIFIABLE

INTANGIBLE ASSETS

IN

FINANC IAL STATEMENTS

Year

Goodwill

n =

150)

~

Identifiable

intangibles

n = 150)

1985

1986

1987

1988

1989

71

69

80

84

83

21

26

38

46

4 4

each year. For the purpose of this study, companies are considered to have recognized

goodwill and/ or identifiable intangibles if these assets had been accounted for in

any

way.

This definition includes any immediate write-off of goodwill/ identifiable

intangibles as well as any capitalization of such assets.

The figures in Table 1 revealed that more companies recognized goodwill than

recognized identifiable intangibles. Also, the number of companies recognizing

identifiable intangibles exhibits a general upward trend over the study period. Only

21 companies accounted for identifiable intangible assets in their financial statements

in 1985. This increased to 46 companies in 1988, but dropped back to 44 in 1989.

Hence, more than twice the number of companies were accounting for identifiable

intangible assets in 1989 29.3 per cent of the total) compared to the number in

1985 14.0 per cent

of

the total). The average annual increase in the number of

companies recording identifiable intangibles 21.7 per cent per annum) exceeded

the average growth rate in the number of companies reporting goodwill 4.3 per

cent per annum).2

Goodwill

Accounting

Policies,

I985 t

1989

The study findings indicate that a variety of accounting policies had been adopted

for goodwill over the study period. The following categories can be used to summarize

the

1.

2.

3.

4.

accounting policies adopted by sample companies:

Goodwill capitalized and amortized systematically systematic amortization).

Goodwill capitalized and amortized non-systematically non-systematic

amortization).

Goodwill capitalized with amortization treated as an extraordinary item

extraordinary amortization).

Goodwill capitalized as an asset and not amortized no amortization).

2 This finding is contrary to Goodwin and Harris

1991),

who examined the period

1987

to

1989

and

found a greater growth rate for the reporting of good will than for the reporting of identifiable intangibles.

This is possibly due to Goo dwin and Ham ss research sample, which was drawn from only industrial

companies in the

Top

150 of listed Australian companies in comparison to our sample, drawn from

all Australian listed companies).

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5. Goodwill treated as a cumulative deduction from shareholders equity and not

6 .

Goodwill written off in a lump sum as an extraordinary item written-off

7.

Goodwill written off as

a

lump sum against retained earnings and reserves

8.

Goodwill written off

s

a lump sum abnormal item above the line) in the

9. Both

1

and 6. That is, while systematically amortizing goodwill, a lump-sum

10. Both 1 and 8. That is, while sytematically amortizing goodwill, a lump-sum

amortized dangling debit).

extraordinary).

written-off reserves).

profit and loss account written-off abnormal).

extraordinary write-off is also made.

abnormal write-off above the line is also made.

Category 1 capitalization with systematic amortization) is the general method

recommended by AAS

18

para.

40)

and ASRB

1013

para.

35).

However, both

standards allow for lump-sum write-offs of goodwill in certain circumstances. To

the extent that the cost of any acquisition exceeds the fair value of the identifiable

net assets acquired but does not constitute goodwill, that amount should be charged

to the profit and loss account immediately AAS

18,

para.

41;

ASRB

1013,

para.

33). Similarly, the unamortized balance of goodwill should be reviewed at balance

date and, to the extent that future benefits are

no

longer probable, should be written

off to profit and loss AAS

18,

para.

41;

ASRB

1013,

para.

36).

The goodwill

standards are silent

on

the exact treatment of these lump-sum write-offs.No guidance

is provided as to whether such write-offs should be treated

as

operating, abnormal

or extraordinary items. Accordingly, the provisions of

AAS

1 ASA ICAA,

1973),

the general profit and loss standard operative at the time, would become applicable.

Nevertheless, it seems that, from the above categories of goodwill, categories

6 ,

8, 9

and

10

would probably meet the standards requirements in appropriate

circumstances, although those treatments may give scope for companies to engage

in misleading or creative or manipulative accounting. In relation to extraordinary

write-offs, the applicable version of AAS 1 actually listed the write-off of goodwill,

other than in accordance with

a

regular policy of amortization,

as

a specific example

of an item which, in particular circumstances, may fall within the extraordinary

items definition

ASA

ICAA,

1973,

para.

10).

The figures in Table 2 summarize the frequency of adoption of each of the ten

categories of policies in each of the years 1985 to 1989, revealing that the number

of companies adopting the policy of the systematic amortization of goodwill

increased. In 1985, 43.7 per cent of companies accounting for goodwill adopted

this policy, increasing steadily to an

86.8

per cent compliance rate in

1989.

This

trend is in the direction suggested by HI.

To test H1 whether this increasing percentage is significant), the chi-square test

was used to determine whether an association exists between goodwill accounting

policies and the year of the study period.3 Results of testing confirmed the significance

3 In performing this procedure, all accounting policy categories other than systematic amortization

were collapsed into a single group.

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t b

0


8/16

G O O W I L L A N D I D E N T I F I A B L E I N T A N G I B L E A S S E T S

of

the association X2 = 35.72, df = 4

p 0.05 .

However, the general finding is consistent with Goodwin and Harris

(1991),

where three classes of

intangibles brand and trade names, patents, and licences) showed notable increases in incidence

of

recognition.

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G O O D W I L L A N D I D E N T I F I A B L E I N T A N G I B L E

A S S E T S

Table

4

summarizes the frequency with which each of the seven categories of

policies were adopted by companies in each of the years 1985 to 1989, revealing

a general increase in the diversity of accounting policies used by the sample companies

for identifiable intangible assets over the study period. Of the seven different policies,

three were first used in 1985. In 1986, four different policies were used by sample

companies, with this increasing to five and six different policies, respectively, in

1987 and 1988. The number of different policies used reduced to four in 1989,

but only one of these represented a comprehensive amortization policy.

Consistent with the trend suggested by H2, a decreasing percentage of companies

adopted the accounting policy of the systematic amortization of identifiable

intangible assets. While 61.9 per cent of companies recognizing identifiable intangibles

adopted the systematic amortization policy in 1985, this had reduced to 45.4 per

cent in 1989.6

To test Hypothesis

2,

the chi-square test was used.7 Despite the actual decrease

in the percentage of companies systematically amortizing identifiable intangibles,

this testing could not reject the null hypothesis of no association

X 2 =

1.70,

df =

4,

p >

0.05 .

Nevertheless, in addition to the increase in the percentage of companies adopting

the policy of capitalization without any amortization, there has been an increase

in the number of companies adopting the lump-sum extraordinary write-off policy

over the study period. While no company had adopted this policy in 1985, three

or 6.8 per cent of companies recognizing identifiable intangibles) had made

extraordinary write-offs in 1989.

A

further 6.8 per cent of companies recognizing

identifiable intangibles had adopted a mixed policy in which at least one class

of capitalized identifiable intangibles was not amortized. This policy was not adopted

by any company in 1985.

From the above discussion, it can be concluded that

AGR

5, published in December

1985 and recommending the systematic amortization of intangibles, has been ignored

by a significant percentage of sample companies over the period studied.

In

fact,

54.5 per cent of companies recognizing identifiable intangibles failed to follow its

guidance

in

1989.

Joint Testing

of

Incidence

of

Companies Adopting Policies

of

Non-Amortization

To

highlight the trend toward the non-amortization of identifiable intangibles over

the study period, Figure 1 graphs the number o companies in each of the years

1985 to 1989 electing not to amortize capitalized goodwill and identifiable intangible

asset balances as operating expenses. While the graph highlights the sharp reduction

in the number of companies electing not to amortize goodwill balances, it also

6 This finding is in contrast to Good win and H am s

1991 ) ,

where an increa sing percentage of companies

adopted the sy stematic amortization policy over the period 1987

to

1989. As with the c ontrary finding

noted

in

footnote 1 a possible explanation stems from the different sample definitions.

7

As

with the testing of H1, all accounting policy categories other than systematic amortization were

collapsed into a single group.

99


11/16

T

A

4

S

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6

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y


12/16

G O O D

W I L L A N D I D E N T I F I A B L E I N T A N G I B L E A S S E T S

FIGURE

INCIDENCE OF COMPANIES NOT AMORTIZING GOODWILL/ IDENTIFIABLE

INTANGIBLE ASS ET BALANCES AS OPERATING EXPE NSES

35

30

25

Goodwill

1

1985 1986 1987 1988 1989

Year

highlights the converse

in

relation to identifiable intangible asset balances. This

is consistent with the relationship suggested by H3.

The chi-square test was used to determine whether an association exists between

non-amortization and the year

of

the study period,8 resulting in confirmation of

the significance of the association posited in H3 X2 = 36.55, df = 4

p

< 0.01).

Thus, over the period

1985

to

1989,

a diminishing number of companies recognizing

goodwill have chosen not to make any charges against operating profit for the

amortization or write-off

of

goodwill. However, at the same time, an increasing

number of companies recognizing identifiable intangible assets have chosen not

to make any charges against operating profit for the amortization or write-off of

those intangible balances.

As

a joint test of non-amortization, this supports the

The comparison was made between companies not amortizing goodwill as operating expenses and

those not amortizing identifiable intangibles

as

operating expenses,

the

analysis being over

the

period

1985 to 1989.

10


13/16

A B A C U S

general proposition that companies have been increasingly recognizing identifiable

intangible assets in an effort to reduce the impact on reported operating profits

of the requirement for the amortization of goodwill.

The Relative S ize of Capitalized Goodw ill and Identfiab le Intangible Asset B alances

It was noted above that, associated with the increase in the number of companies

recognizing identifiable intangibles over the study period, there was an increase

in the percentage of companies electing not to amortize capitalized identifiable

intangible asset balances. Putting this obsevation into perspective, it is appropriate

to examine the relative size of capitalized goodwill and identifiable intangible asset

balances. If such balances were not material then these observations would be trivial

and would not warrant any degree of concern.

Table

5

presents a comparison of the average size of goodwill and identifiable

intangible balances, as a percentage of both total assets and shareholders equity,

for those companies which have capitalized such assets within the balance sheet

whether or not such balances are subject to amortization charges).

On

average,

the capitalized identifiable intangible asset balances have been approximately three

times the size of the capitalized goodwill balances. Further, in terms of the materiality

guidelines laid down in AAS

5 Materiality in Financial Stateme nts

ASA

8i

ICAA,

1974), the identifiable intangibles balances would be considered material, being

greater than 10 per cent of equity in all years AAS 5 , paras

11, 12).

Compa nies Capitalizing Both Goo dwill and Iden tfiable Intangible Assets

The subset of results in Table

5

are not directly comparable as they are a comparison

of different subsets of companies. To overcome this potential difficulty, Table 6

compares the relative average size of capitalized goodwill and identifiable intangible

asset balances for only those companies recognizing

both

classes of asset in each

TABLE

SUMMARY OF RELATIVE AVERAGE SIZE O F CAPITALIZED GOODWILL A ND

IDENTIFIABLE INTANGIBLE ASSET BALANCES:

COMPANIES CA PITALIZING BOTH CLASS OF ASSET

Percentage of total assets

Goodwill

Identifiable intangibles

Percentage of shareholders

equity

Goodwill

Identifiable intangibles

1985

1986 1987 1988 1989

1.6

2.9 2.9 2.0 3.7

9.2 6.5 4.1 4.8 6.1

3.2

7.

I 5.5

4.3 13.1

14.6 14.7 9.0 13.3 17.3

n

=

11)

n

=

17)

n

=

22)

n

=

30)

n

=

33)

102


14/16

T

7

S

U

M

M

A

O

N

M

B

O

C

M

P

A

E

A

M

O

Z

N

C

T

Z

G

W

I

L

A

I

D

F

A

I

N

B

A

E

B

C

M

P

A

E

C

T

Z

N

B

O

H

C

O

A

E

1

1

1

1

1

n

n

n

n

n

G

w

8

7

7

1

6

7

2

9

5

2

9

0

3

1

0

I

d

n

a

e

n

a

b

e

6

5

5

7

4

2

1

6

6

1

5

7

1

5

5

n

3

n

3

n

1

1

n

1

n

2

Q

b

P

h

h

b

b

h

k

h

k

Q

t

h

b

t t h t


15/16

A B A C U S

year. The general conclusion, though, is the same as that drawn above; that is,

that identifiable intangible assets balances are a material item in the balance sheets

of those companies which have capitalized such assets.

Facilitating further comparison of companies capitalizing both goodwill and

identifiable intangible assets, Table

7

shows the accounting policies used to amortize

the capitalized balances of those companies. It reveals the number of companies

in each year amortizing goodwill compared with the number amortizing identifiable

intangibles.

Comparing the results in Tables

6

and

7,

for companies capitalizing both goodwill

and identifiable intangible assets, identifiable intangible balances are found to be

of greater magnitude than the goodwill balances. Further, for these companies there

is a lesser propensity to amortize those larger identifiable intangible balances.

Consistent with observations made previously, this propensity not to amortize has

increased over the research period.

SUMMARY AND CONCLUSIONS

The findings of this study suggest that the goodwill accounting policies adopted

by companies over the period 1985 to 1989 have increasingly complied with the

relevant goodwill accounting standards. In particular, this increased compliance

can be attributed to the introduction of ASRB 1013. The study found a reduction

in the diversity of accounting policies adopted for goodwill over the study period

and an increase in the number of companies electing to amortize goodwill balances

systematically.

There was an observed increase in the number of companies recognizing identifiable

intangible assets over the period 1985 to 1989, and an increase in the diversity of

accounting policies adopted for those identifiable intangibles. In particular, there has

been a decrease in the percentage of companies adopting the systematic amortization

policy and a corresponding increase in the percentage electing not to amortize

identifiable intangibles. T h s despite the guidance contained in AGR 5.

While further research would be required to determine conclusively the exact

reasons for the increase in the recognition of identifiable intangible assets over

the study period, it seems appropriate to conclude from the above that the studys

data supports anecdotal inferences and assertions claiming that companies have

been recognizing identifiable intangibles in an effort to reduce the impact on reported

operating profits of the requirement for the amortization of goodwill balances.

A final comment can be made regarding the general business communitys respect

for the professions standards and guidelines. As noted above, the results from

the study confirm prior research findings documenting widespread non-compliance

with the professions guidance contained in AGR 5. Also, the results suggest that

it required the introduction of ASRB

1013

with legislative backing to enforce

compliance with the goodwill standard. Taken together, these observations are a

sad reflection on the ability of the professional accounting bodies to enforce their

own standards and guidelines in circumstances where these are controversial to

the business community.

104


16/16


RE F E RE N CE S

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Accounting Standards Review Bo ard, Approved A ccounting Stand ard ASR B 1013, Accounting for

Goodwill, Ap ril 1988.

Australian Society of Accountants and the Insti tute of Cha rtered Accountants in Australia, Statemen t

of Accounting Standards AAS 1, Profit and Loss Statements, De cem ber 1973.

- Australian Accounting Standards AAS 5,

Materiality in Financial Statements,

April 1974.

Statement of Accounting Standards, AAS 18, Accounting

for

Goodwill, March 1984.

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for

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S.

and G. Peirson,

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C.,

Accounting for Goodwill,

7he Chartered Accountant in Australia,

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Standish, P.

E.

M., Accounting Research Study No. 2, Australian Financial Reporting, Accountancy

W alker, B., All Eyes on the Values of Many Brands, New A ccountant, 27 July 1989.

Williams, S . and G. Carnegie, The Continu ing Imp act of A AS

18

Australian Accountant, May 1989.

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Accounting

Forum,

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following the app licab ility of A SR B 1013,

The Paczfc Accounting Re view,

Jun e 1992.

July 1988.

Dece mber 1975.

1986a.

Review, November 1991.

Research Foun dation , 1972.

105

Abacus Volume 29 issue 1 1993 [doi 10.1111%2Fj.1467-6281.1993.tb00423.x] GRAEME WINES; COLIN FERGUSON -- An Empirical Investigation of Accounting Methods for Goodwill and Identifiable

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