HOW IS THE IMPLEMENTATION OF GOODWILL ACCOUNTING IN INDONESIA?
Article Sidebar
DOI:
Read Counter : 49
Download : 48
Main Article Content
Ummi Askiah
Tri Yuni Bhaktiningsih
Sarah Widyana
Amrie Firmansyah
Abstract
Goodwill is generated when one firm merges with another one. When the amount spent on acquiring something is higher than the estimated worth of its assets, it is recorded as goodwill on the financial statement. In the past, goodwill used to be amortized. However, modern procedures now require annual impairment testing, which considers the belief that goodwill has an unlimited life and continued economic value. This study explores the disclosure of goodwill and impairment in technology companies in Indonesia and analyzes the consistency of goodwill impairment reporting under PSAK 48. The study also seeks to understand how technology companies in Indonesia apply accounting standards related to goodwill and its impact on financial statements and company performance. This work employs a qualitative research approach, utilizing data sources from a scoping evaluation of previous research on goodwill. This study demonstrates that the laws regulating goodwill have undergone many revisions, and goodwill is currently recognized as an asset obtained through a corporate merger. It is necessary to assess the impairment of goodwill annually. This research is anticipated to contribute to the existing knowledge on goodwill within financial accounting literature or academic scholarship framework.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Amel-Zadeh, A., Glaum, M., & Sellhorn, T. (2023). Empirical Goodwill Research: Insights, Issues, and Implications for Standard Setting and Future Research. European Accounting Review, 32(2), 415-446. https://doi.org/10.1080/09638180.2021.1983854
Bagna, E., Ramusino, E. C., & Ogliari, M. (2023). The Impact of Different Goodwill Accounting Methods on Stock Prices: A Comparison of Amortization and Impairment-Only Methodologies. International Review of Financial Analysis, 85, 1–13. https://doi.org/10.1016/j.irfa.2022.102432
Ferramosca, S., & Allegrini, M. (2021). Impairment or Amortization of Goodwill? An Analysis of CFO Perceptions of Goodwill Accounting. European Management Journal, 39(6), 816–828. https://doi.org/10.1016/j.emj.2021.03.001
Hargrave, M. (2024, June 28). Goodwill (Accounting): What It Is, How It Works, How to Calculate. Retrieved 5 May, 2024, from: https://www.investopedia.com/terms/g/goodwill.asp
Hellman, N., & Hjelström, T. (2023). The Goodwill Impairment Test Under IFRS: Objective, Effectiveness and Alternative Approaches. Journal of International Accounting, Auditing and Taxation, 52, 1-18. https://doi.org/10.1016/j.intaccaudtax.2023.100558
IFRS Foundation. (2020). Business Combinations—Disclosures, Goodwill and Impairment. Retrieved 5 May, 2024, from: https://cdn.ifrs.org/content/dam/ifrs/project/goodwill-and-impairment/goodwill-and-impairment-dp-march-2020.pdf
Ikatan Akuntan Indonesia. (2014). PSAK 48: Penurunan Nilai Aset. Retrieved 5 May, 2024, from: https://sak.iaiglobal.or.id
Ikatan Akuntan Indonesia. (2015). PSAK 19: Aset Takberwujud. Retrieved 5 May, 2024 from: https://sak.iaiglobal.or.id
Ikatan Akuntan Indonesia. (2019). PSAK 22: Kombinasi Bisnis. Retrieved 5 May, 2024 from: https://sak.iaiglobal.or.id
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2020). Intermediate Accounting: IFRS Edition (4th ed.). Singapore: John Wiley & Sons, Inc.
Kunisch, S., Denyer, D., Bartunek, J. M., Menz, M., & Cardinal, L. B. (2023). Review Research as Scientific Inquiry. Organizational Research Methods, 26(1), 3–45. https://doi.org/10.1177/10944281221127292
Peters, M. D. J., Marnie, C., Tricco, A. C., Pollock, D., Munn, Z., Alexander, L., Patricia, M., Godfrey, C. M., & Khalil, H. (2020). Updated Methodological Guidance for the Conduct of Scoping Reviews. JBI Evidence Synthesis, 18(10), 2119–2126. https://doi.org/10.11124/JBIES-20-00167
Wen, H., & Moehrle, S. R. (2016). Accounting for Goodwill: An Academic Literature Review and Analysis to Inform the Debate. Research in Accounting Regulation, 28(1), 11–21. https://doi.org/10.1016/j.racreg.2016.03.002
Xu, L., Guan, Y., Fu, Z., & Xin, Y. (2020). Peer Effect in the Initial Recognition of Goodwill. China Journal of Accounting Research, 13(1), 57–77. https://doi.org/10.1016/j.cjar.2020.01.001
Zhao, X., Tham, J., & Mu, Q. (2023). M&A Goodwill Impairment, Management Ability, and Firm Performance: Empirical Evidence from Chinese A-Shares. Journal of Eastern European and Central Asian Research, 10(5), 741–752. https://doi.org/10.15549/jeecar.v10i5.1299
Zheng, L., Guo, X., & Zhang, K. (2021). Does the Non-penalty Regulation of CSRC Have Information Content? Evidence from the Accounting Risk Warning of Goodwill Impairment. Proceedings of The 7th International Conference on Industrial Economics Systems and Industrial Security Engineering, 9–22. https://doi.org/10.1007/978-981-33-4363-4_2