Goodwill as an accounting and analytical category ensuring evaluation and management of corporate reputation

Abstract

Introduction. The efficiency of enterprises relies on the accurate assessment and accounting representation of their assets. In the context of the modern society, significant attention is devoted to intangible resources, particularly goodwill, as a key element of corporate reputation. However, the existing accounting-analytical system requires modernization to encompass all aspects of value creation. Goodwill issues captivate the interest of accountants, financiers, and managers, as this unique asset allows companies to gain a competitive edge in their respective industries. Objective. The purpose of the work is to study ways to improve the efficiency and accuracy of accounting for intangible assets, which will allow enterprises to provide reliable financial reporting and take into account important components of goodwill in the internal and external environment; studying the role of goodwill in assessing the value of a business on an ongoing basis; search for ways to improve the accounting and analytical support for the assessment and management of the business reputation of the enterprise, specific changes in the plan of accounts are proposed to improve the accounting of intangible assets, in particular elements of goodwill. Method (methodology). Scientific methods and approaches were used in the work, in particular, a comparison to study the main provisions of IFRS and NP(S)BO, analysis of the difference in approaches to accounting for goodwill and intangible assets between these standards; formalization and generalization of the main technological tasks of the organization of accounting of intangible assets for the implementation of the principles of goodwill in the system of ensuring continuity of activity and maintaining a positive business reputation of the enterprise. Results. In the course of the study, an in-depth analysis of the existing methods of goodwill assessment was carried out and their limitations in taking into account all components of this important category of assets were revealed. In response to this limitation, we have developed our own method that takes into account intangible assets that are not reflected on the company's balance sheet. The proposed methodology calculates goodwill as the difference between the fair value of net assets and their book value, considering revalued asset values and off-balance-sheet intangible assets such as business relationships, peculiarities of activity, and personnel knowledge. A supplementary recommendation includes modifying the Chart of Accounts to account for intangible assets, detailing them at an analytical level. These changes can identify and reflect important goodwill elements previously unaccounted for in financial reporting. The outlined modifications address the need for meticulous intangible asset accounting and contribute to increased reliability of financial reporting, essential for informed managerial decisions and establishing trust among stakeholders.