Comparison Accounting Treatment Of Goodwill Between China And America

Goodwill is a special interest which is held by the enterprise and is related to itself. Also, it is a special enterprise resource. It is a topic issue about how to recognize and measure goodwill accurately and appropriately. America is the first country that standard the goodwill. China is also norm the accounting treatment of goodwill in the "Corporate accounting standards" in2006. However, the current accounting standards still have many problems for accounting treatment of purchased goodwill. For example, it requires not recognize internal generated goodwill. The recognition method couldn’t reflect the nature of goodwill. And nowadays, the studies are fewer about using the listed companies’data analysis. Therefore, using the practical data to reflect the accounting treatment of goodwill accounting standards defects will be more significant.This thesis started from the accounting standards about goodwill, comparing the U.S. accounting standards for goodwill and Chinese accounting standards, to analyze the similarities and differences between them. Then, using the practical situation and case study, it illustrated the goodwill trends and standards implementation status. Lastly, it found the problems of the accounting standards and made some suggestions.After comparing the two countries accounting standards, from two aspects, which are the historical change of the accounting standards and the requirement of recognition, measurement and disclosure, it found that there have both similarities and differences. And it believed that the partial recognition method is more proper. But the impairment test method should be adjusted, especially the time of test. By analyzing the listed companies’data during2007to2011, including the recognition amount of goodwill, the amount of impairment loss, the method of impairment test and the disclosure of goodwill, it concluded that Chinese goodwill intensity is small, and loss intensity is very small, the disclosure situation is not good. While, American goodwill intensity is bigger, loss intensity is also small; the disclosure situation is much better. Then, based on the Shanghai Electronic Co., Ltd and Myers Industries case studies, it further found that the US standards require interim impairment test was more truly reflected the changes of goodwill. Therefore, this thesis concluded that the current standards have some defects on internally generated goodwill, acquisition method, non-control interest, impairment test and disclosure. So, it recommended that recognize internally generated goodwill outside the financial report, cancel the equity method gradually, be with the partial recognition of goodwill, strengthen the disclosure and optimized the impairment test.