A special section for donations should be placed in cost reports. This grouping should include monetary donations as well as estimated cost for donated goods and services.
In the field of accounting the Finical Accounting Standards Board (FASB) provides guidance on how to deal with goodwill and how to account for it on finical statements. When done properly goodwill can provide tax relief for a company.
The limitations of accounting are the following: Accounting estimates, professional judgment, verifiability, measurability, limited predictive value, fraud and error. Measurability is limitation due to all entries in accounting record must have a monetary value, and so there is no accounting measure of goodwill or workforce competence.
You cannot sell goodwill, at least in accounting. Goodwill is the amount that you overpaid. You can sell an asset at a high price but you cannot sell directly the goodwill.
The concept of goodwill accounting involves paying for an intangible service instead of tangible ones. An example of this is paying for a company's good reputation.
Leslie G. Campbell has written: 'Accounting for goodwill' -- subject(s): Goodwill (in business, etc.), Accounting 'International auditing' -- subject(s): Auditing, Standards
Goodwill is recorded in the accounting records when a company purchases another company for a price exceeding the fair value of its identifiable net assets. The journal entry to record goodwill involves debiting the Goodwill account and crediting the corresponding payment accounts like Cash or Accounts Payable. Each year, companies must perform impairment tests on goodwill and adjust the carrying value if necessary through a journal entry that debits the Goodwill Impairment Loss and credits the Goodwill account.
On the assets side. Goodwill = (Liabilities + equity or capital) - Assets. Goodwill is an intangible asset. As per Wikipedia, it is the intangible but quantifiable "prudent value" of an ongoing business beyond its assets. Goodwill could correspond to the estimated financial value of brand name, intellectual property, trademark, etc. Goodwill does not serve much purpose if a company is closed down. In the absence of Goodwill, the above equation reduces to the traditional accounting equation: A = L + C.
intangible asset
Yes, goodwill gets pushed down to the Reporting Entity level.
The "journal" is the first transaction found on the accounting record.
Answer - Goodwill impairment occurs when the value of the goodwill of a business unit declines to an amount less than the carrying value of the goodwill on the company's books. With the adoption of SFAS 142 by the Financial Accounting Standards Board (FASB), audited companies are now required to test goodwill annually for impairment. This testing is done by valuing the business unit having the goodwill.
It's difficult to place the exact value on goodwill and it will always involve expert judgement.