bafs

Topics: Balance sheet, Accounts receivable, Generally Accepted Accounting Principles Pages: 23 (8155 words) Published: October 22, 2014
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Chapter 9

Serial No: _____

Partnership Goodwill (合夥商譽)

9.2 Goodwill (商譽)
Goodwill is the excess of the value of an entire business (企業的整體價值) over the fair value (market value) (公允價值) of its separate net assets (可分離淨資產). Goodwill is not a separable asset (可分離資產) as it cannot be sold separately (分割出售).

Reasons for the existence of goodwill (商譽的存在的原因)  Good reputation (良好的聲譽)
 Experienced, efficient and reliable employees (經驗豐富、效率高和可靠的員工)  Good relationships with suppliers and customers (與供應商和顧客有良好關係) These advantages (優勢) are intangible assets (non-current) (無形非流動) of a business that may contribute to the existence of goodwill (可導致商譽的形成).

Purchased goodwill (購買商譽)
Purchased goodwill is the excess of the purchase price of the acquired business over the fair value of its separable net assets. It will be shown in the books of the buyer as goodwill (顯示在買家的帳簿內) together with other assets and liabilities acquired (連同其 他收購的資產和負債).

Inherent goodwill (內在商譽)
Inherent goodwill is the goodwill generated internally (內部產生的商譽), which is not purchased upon the acquisition of another entity. It should not be shown in the accounting books of a business, unless it is a partnership (除非是合夥,內在商譽不應展示在 企業的帳目上).

9.3 Valuation of goodwill (商譽計價)
There is no uniform method of valuing goodwill. Some common methods (一些常用的方法) are illustrated as follow:

1 Average sales method (平均銷貨法)
Goodwill is valued as a multiple of the average annual sales over a number of past years (商譽價值按過去若干年的平均銷貨額, 乘以某個倍數計算). This method is particularly applicable to trading business (此方法特別適用於從事貨品買賣的企業).

Example 1
If the goodwill is to be valued at four year’s purchase of the average annual sales of the business over last three years, we have Year
Yearly sales
$
Average annual sales = $420,000 ÷ 3 = $140,000
2008
120,000
Goodwill = Average annual sales x No. of years’ purchase
2009
140,000
2010
160,000
= $140,000x4 = $560,000
420,000

2 Average fee income method (平均服務費收益法)
Goodwill is valued as a multiple of the average annual fee income over a number of past years (商譽價值按過去數年的平均服務 費收益,乘以某個倍數計算). This method is particularly applicable to professional service business (此方法特別適用於從事專業 服務行業的企業).

Example 2
If the goodwill is to be valued at four year’s purchase of the average annual fee income of the business over last four years, we have
Year
Yearly fee income
$
Average annual fee income = $640,000 ÷ 4 = $160,000
2007
100,000
2008
140,000
Goodwill = Average annual fee income x No. of years’ purchase 2009
180,000
= $160,000x3 = $480,000
2010
220,000
640,000
1

3 Average net profit method (平均純利法)
Goodwill is valued as a multiple of the average annual net profit over a number of past years (商譽價值按過去數年的平均純利, 乘以某個倍數計算). This method is particularly applicable to any type of business (此方法適用於任何類型的企業).

Example 3

Class work 1

If the goodwill is to be valued at two year’s purchase of the average annual net profit of the business over last four years, we have

Goodwill was to be valued at two years’ purchase of the last five years’ average net profits. The net profits for the last five years were as follows:

Year

Yearly net profit
$
60,000
62,000
69,000
79,000
270,000

2007
2008
2009
2010

Year ended 31 December

2006
2007
2008
2009
2010

$
35,000
45,000
44,000
40,000
46,000

Goodwill
Average annual net profit = $270,000 ÷ 4 = $67,500

= ($35,000 + $45,000 + $44,000 + $40,000 + $46,000) × 2/5

Goodwill = Average annual net profit x No. of years’ purchase

= 84,000

= $67,500x2 = $135,000
= $135,000

4 Average super profit method (平均超越利潤法)
The net profit used in the above method is not true profit. This is because the net profit has not taken into the account the following factors:
(a) Value of time and effort contributed by the owner(s). (salaries to partnership) (東主付出的時間、心血的價值) (b) Value of alternative use of capital contributed by the...
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