Plotnikov V.S.Russian Presidential Academy of National Economy and Public Administration (RANEPA), Balakovo Branch, Balakovo, Russian Federation vcplotnikov@yandex.ru
Plotnikova O.V.Russian Presidential Academy of National Economy and Public Administration (RANEPA), Balakovo Branch, Balakovo, Russian Federation vcplotnikov@yandex.ru
Subject Over the past two or three years, after the issue of new International Financial Reporting Standards, i.e. IFRS 10, IFRS 11, IFRS 12, IFRS 13 and updated IFRS 3, new versions of consolidated accounting and reporting appeared in the consolidated financial statements concept. They entail the emergence of new objects of this type of accounting and new interpretation of the existing ones. Such objects include goodwill in a business combination, non-controlling interest, control over the investee, etc. Therefore, starting a series of articles on recognition and measurement of these specific objects in consolidated accounting and reporting, we want to emphasize the fact that even those few national holding structures that prepare consolidated financial statements avoid reporting such an intangible asset as goodwill. However, goodwill is a result of a business combination. Failure to disclose this intangible asset in consolidated financial statements results not only in decreasing the reliability of the latter, but also in underestimating the value of assets of reporting companies. In fact, the companies 'rob' themselves, as according to Western auditors, goodwill value in financial statements amounts to 30% of other assets' value. Objectives The main purpose of the article is to investigate the economic substance of goodwill as an object of consolidated accounting, with a view to its recognition and measurement in consolidated financial statements of a parent company. As part of this goal, we set and solved the following tasks: to reveal the economic substance of goodwill for its recognition and measurement in consolidated financial statements; to define its place and role in assessing the financial position of a consolidated group of companies; to identify distinctive features of goodwill vs. nominal value of financial investments in the investee; to describe the constituent elements of the value of goodwill, which is generated in a business combination; to disclose the methodological support to goodwill in consolidated accounting and reporting. Methods The basis of the methodology of goodwill accounting as an individually unidentifiable intangible asset was on the consolidated financial statements concept. This concept enables to consider the operations of a consolidated group of legally independent entities as a whole. Therefore, the concept extends the scope of accounting, which is limited by the method of property isolation. The methodological basis of the research includes the works of leading domestic and foreign scholars on the problems of consolidated financial statements. When investigating the methods of consolidated accounting, we used International Financial Reporting Standards (hereinafter referred to as 'IFRS'), and Federal Laws of the Russian Federation on accounting and consolidated reporting. Results We developed the terminology reflecting the differences in the concept of goodwill being a result of a business combination and changes in the fair value of 'other assets', identifiable assets of the investee, and financial investments that are denominated in a fixed amount of money units and correspond to the fair value of net identifiable assets of the investee. We developed methodological guidelines to account for goodwill formation and changes in its value in consolidated accounting and reporting. Conclusions and Relevance Understanding the economic substance of goodwill for its recognition in consolidated accounting and reporting will not only enhance the credibility of the latter, but also ensure a relevant assessment of financial position of a consolidated group of companies.
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Plotnikov V.S., Plotnikova O.V. Kontseptsiya pozitivnogo ucheta dogovornykh obyazatel'stv [A concept of positive accounting for contractual obligations]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 13, pp. 9–17.
Plotnikov V.S., Plotnikova O.V. Kontseptsiya pozitsionnogo ucheta dogovornykh obyazatel'stv [A concept of position accounting for contractual obligations]. Bukhgalterskii uchet = Accounting, 2013, no. 9, pp. 122–125.
Plotnikov V.S., Plotnikova O.V. Kontseptsiya finansovogo kapitala v sdelke po ob"edineniyu biznesa [A concept of financial capital in a business combination deal]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 49, pp. 9–16.
Plotnikov V.S., Plotnikova O.V. Uchet finansovykh instrumentov kak faktor obespecheniya dostovernosti informatsii o funktsionirovanii kompanii na rynke: monografiya [Accounting for financial instruments as a factor to assure the reliability of information on a company’s operations in the market: a monograph]. Moscow, ID Finansy i kredit Publ., 2013, 251 p.
Plotnikov V.S., Yusupova I.V. Evolyutsiya kontseptsii konsolidirovannoi finansovoi otchetnosti [Evolution of the consolidated financial statements concept]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 23, pp. 2–7.
Plotnikova O.V. Uchet khedzhirovaniya denezhnykh potokov po operatsiyam s optsionami [Accounting for cash flow hedges for transactions with options]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 12, pp. 11–17.
