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Monday, December 17, 2012 - 12:09 IST
Goodwill, more plug than asset
BY Aswath Damodaran
To understand the treatment of goodwill in GAAP, it is worth taking a quick look at how acquisitions have been accounted for over time, at least in the United States.
There is no asset on a company’s balance sheet that wreaks more havoc on valuation and good sense than goodwill. The first problem with goodwill is that it sounds good, and when something sounds good, people feel the...
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