How to solve the problem of goodwill today?

Go to the vegetable market and sell it with rotten cabbage, what goodwill does a Chinese company have?

Goodwill is: when listed company A engages in mergers and acquisitions and purchases the assets of another company B, the actual payment is higher than the net assets of the purchase target. For example, if a listed company A intends to acquire Company B, and Company B asks for 2 billion, but Company B's net assets are only 1.5 billion, then the premium of 500 million is goodwill, which can also be simply understood as brand value.

For example, if you open a hotel, the assets add up to 1 million, and the local area has been open for many years, and the profit is not bad, and you want to sell it for various reasons, then you bid 1.5 million yuan to transfer.

Therefore, goodwill itself does not directly generate any benefits, so a higher goodwill is certainly not a good thing.

Accounting goodwill refers to the potential economic value that can bring excess profits to the operation of the enterprise in the future period, or the capitalized value of the expected profitability of an enterprise that exceeds the normal profitability of identifiable assets (such as the average return on investment of society).

Literally, it's business reputation; If it is used as a proper noun, it has a specific meaning.

In layman's terms, it's like the value that comes with business reputation.

In the past two days, all kinds of goodwill explosions, various impairments, and all kinds of huge losses in A-shares.

Goodwill refers to the potential economic value that can generate excess profits for the business operations in the future period, or the capitalized value of an enterprise's expected profitability that exceeds the normal profitability of identifiable assets (such as the average social return on investment). Goodwill is an integral part of the overall value of a business. In a business combination, it is the difference between the cost of the investment of the purchased enterprise and the fair value of the net assets of the merged enterprise.

Personal understanding: For example, it means that when people buy your company and give money, the money given is greater than the net assets of your company, why do people give you more? It's because people think that your company has potential and reputation, although you have any money, but your company is going to that side, everyone knows that you are willing to do business with you This is similar to people's reputation, and it makes no sense to leave the company (enterprise) It's just that goodwill is not usually reflected, and it will only appear when it is not under the same control As for Shenma is a merger under the same control, it is the relationship between two or more merged enterprises

The formation of the merchant ship's reputation is the difference between the cost of the pants and the pro rata share of identifiable net assets.

When the equity method is adopted, the goodwill reflected in the excess of the consideration paid to the equity (i.e., the fair value of the investee's identifiable net assets and the proportion of shareholding) is hidden in the long-term equity investment and cannot be recognized as goodwill; 4. If it is in the form of a non-enterprise merger, the goodwill enjoyed by the enterprise is directly included in the recorded value of the long-term equity investment, and the amount of goodwill enjoyed can be registered for future reference, and the goodwill is not recognized.

Goodwill [shāng yù] The Chinese word goodwill is a Chinese word, pinyin is shāng yù, English is goodwill, usually refers to the value formed by an enterprise that can obtain a higher than normal rate of return on investment under the same conditions. This is due to the advantages of the geographical location of the enterprise, or due to various reasons such as high operating efficiency, long history, and high quality of personnel.

Compared with peer companies, excess profits can be obtained. [1] Goodwill refers to the capitalized value of the potential positive or economic value that can generate excess profits for the business operations in the future period, or the expected profitability of an enterprise exceeds the normal profitability of identifiable assets (such as the average social return on investment). Goodwill is an integral part of the overall value of a business.

In the case of a business combination, it is the difference between the cost of purchasing the investment of the enterprise and the fair value of the net assets of the merged enterprise. Chinese goodwill, foreign name goodwill, explains that the reason for the formation of goodwill is mainly that when the enterprise merges, there is a difference between the cost paid and the share of identifiable net assets enjoyed proportionally, that is, if the consideration paid is large and the rights and interests enjoyed are small, the difference is regarded as the goodwill of the investee that can be enjoyed. There are four specific situations:

1. In the case of a merger of holdings not under the same control, the part of the merger cost that exceeds the equity (i.e., the fair value of the investee's identifiable net assets and the proportion of shareholding) shall be recognized as goodwill in the consolidated financial statements; 2. In the case of an absorption merger not under the same control, the part of the merger cost that is more than the equity (i.e., the fair value of the investee's identifiable net assets and the proportion of shareholdings) shall be recognized as goodwill in the individual statements of the merging party;

GoodwillGoodwill refers to the ability of a business to obtain excess returns.

It usually refers to the intangible value formed by the enterprise due to its superior geographical location, or because of its good reputation, or due to proper organization, high production and operation efficiency, or due to advanced technology and mastery of production know-how.

Expand your information; Prerequisites for goodwill evaluation:

1) Goodwill is generally assessed when there is a change in property rights or a change in the business entity.

2) Goodwill is generally evaluated on the premise of excess returns, that is, it is limited to profitable enterprises or when their economic benefits are higher than the average level of the same industry or society.

Goodwill is assessed using only the present value of earnings method.

Goodwill refers to the portion paid by the purchaser that exceeds the fair value of the acquiree's net assets, which arises only in the business combination. Goodwill can be divided into self-created goodwill and consolidated goodwill. In accordance with the provisions of the Accounting Standards:

Self-created goodwill is not recognized in accounting and is not included in assets; Consolidated goodwill is generated in the course of a business combination and recognized as an asset.

The term "goodwill" first appeared in the mid-to-late 16th century, first as a commercial word, "goodwill is all the favorable conditions obtained in the business activities of a business." "But goodwill in the early days didn't get the accounting community seriously.

Extended Content: Triadism".

The "triadic theory" of goodwill: Regarding the nature of goodwill, the more authoritative views are the three arguments introduced by Hendrickson, a famous contemporary accounting theorist in the United States, in his monograph "Accounting Theory", namely, the theory of goodwill value, the theory of excess returns, and the theory of total price account. These three arguments are called the "triad" of goodwill.

Favor axiology.

The goodwill value theory believes that goodwill arises from the good image of the enterprise and the good impression of customers towards the enterprise, which may originate from the superior geographical location, good reputation, favorable business status, good labor-management relations, exclusive privileges and good management.

Since these factors are invisible and intangible, and the amount cannot be recorded in the accounts, goodwill actually refers to the above-mentioned intangible resources of the enterprise, so the goodwill value theory is also called the intangible resource theory.

Goodwill is something that cannot be seen, touched, or bought or sold, and is not a tangible asset or an intangible asset, but is the intrinsic value of an enterprise, which can only be realized when the enterprise as a whole. Goodwill should also be considered when investing, 100w of assets you invest 150w, the extra is goodwill, but it can never be purchased separately from the enterprise or **. I only sell goodwill, and I still keep the business, which is impossible.

A trademark is an actual sign of an enterprise, which can be understood as such, but it is not equal to goodwill.

The value of goodwill in China is actually a tool used by the public to deceive.

The accounting community in various countries has different views on how to account for goodwill, and there are generally the following three treatment methods:

Goodwill is recognized separately as an asset and charged on amortization over its projected useful life. According to this view, the merged enterprise has incurred excess expenses in order to obtain excess profits in subsequent years, and this excess cost indicates the existence of goodwill in the merged enterprise. Goodwill also meets the definition of assets, and like other assets, it plays an effect in the process of generating future income of the merging entity, and it itself will be lost, just like deferred assets such as start-up expenses, which should be amortized on a regular basis to match the excess income obtained, which is in line with the accrual principle and the principle of robustness, otherwise it will inflate profits in the future.

Goodwill is regarded as an equity offsetting item, which is written off immediately at the time of merger, and directly writes off the current earnings or retained earnings of the merged enterprise. According to this view, the value of goodwill is very uncertain and cannot exist and be realized on its own, and the factors that form goodwill are difficult for the enterprise to control, and goodwill may not continue to exist after the merger. For example, the original superior geographical location, due to the development and development of the city, may not still be in an advantageous position now or in the future; Due to the personnel changes of key management personnel, the current or future management level may not be as high as before, and so on.

If it is listed as goodwill non-amortization or amortization in installments, it does not meet the principle of robustness. Therefore, the combined goodwill should be directly offset in its accounting treatment with the shareholders' equity of the merging enterprise, i.e., retained earnings, or directly against the current earnings of the merging enterprise (a portion of the overpayment by the merging enterprise should be regarded as an expense related to the combined business).

Goodwill is treated as a permanent asset and is not amortized. According to this view, the purchased goodwill is an asset that can bring more than the normal profit level to the purchasing enterprise during the M&A transaction. As an asset, goodwill should be capitalized.

The goodwill of a successful business will be maintained in perpetuity and its value will not decrease. In addition, the various expenses incurred in the past production and operation process of the merged enterprise have formed unrecorded self-created goodwill. These expenses have previously been included in the expense to offset past gains, and now the recognized goodwill is amortized by the acquiring enterprise after the merger, resulting in double counting of goodwill expenses.