In 2001, the FASB (Financial Accounting Standard Board) introduced accounting regulations SFAS 141 and SFAS 142 to improve the relevance, representational faithfulness, and comparability of financial reporting. The new standards have profoundly changed the accounting for business combinations and goodwill under US GAAP by requiring reporting entities to no longer amortize goodwill over its expected useful life, but to test for impairment annually. However, the new regulation has met sharp criticism for creating a scope for high levels of managerial discretion which may be exercised opportunistically in the accounting for goodwill. This study examines whether the proportion of purchase price allocated to goodwill differs between public and private acquisitions. We try to answer this question by carrying out a quantitative study on 481 observations, between the period of 2001 to 2005 by studying the relationship between acquirer type (Public vs. Private) and target firm characteristic on goodwill allocated, and we find the following results: 1) Public acquirers allocate higher levels of goodwill in comparison to private acquirers. (2) Market-to-book values of private target firms are not positively correlated with recorded goodwill levels.

Em 2007 foi sancionada a Lei no 11.638, que possibilitou a adoção das Normas Internacionais de Relato Financeiro (International Financial Reporting Standards - IFRS) no Brasil. A convergência às IFRS trouxe diversas inovações, incluindo dentre elas a contabilização das aquisições de empresas, normatizadas pelo Pronunciamento Técnico CPC 15 - Combinações de negócio, que tornou obrigatória a aplicação do método de aquisição. Por esse novo modelo, a entidade adquirente contabiliza os ativos identificáveis adquiridos e os passivos assumidos da adquirida pelos seus respectivos valores justos. Já o ágio por expectativa de rentabilidade futura (goodwill) passa a ser mensurado pela parcela do valor justo da contraprestação transferida que não foi individualmente identificada, sendo realizado exclusivamente por meio do teste de impairment. Esta tese tem o objetivo de identificar fatores determinantes no percentual do custo de aquisição alocado como goodwill nas combinações de negócios realizadas e divulgadas pelas 101 empresas que compõe o Índice Brasil Amplo (IBr-A) durante o período entre 2009 e 2015. Foram identificados e coletados, em grande parte, manualmente, dados sobre 442 combinações de negócios, e utilizaram-se efetivamente as 307 observações em que foi reconhecido goodwill. Foi empregada uma técnica multivariada de dependência conhecida como modelos hierárquicos lineares ou modelos multinível (HLM), cuja característica basilar é a captura da estrutura aninhada dos dados, considerando a variabilidade dos dados dentro dos 39 segmentos econômicos das empresas da amostra deste estudo. Os resultados indicaram a existência de uma estrutura hierárquica, na qual o segmento econômico de atuação da adquirente explicou em torno de 15% da variabilidade no percentual do custo de aquisição alocado como goodwill. Durante a pesquisa foram testadas cinco variáveis relacionadas a fatores de 1o nível (percentual de remuneração variável da diretoria, relevância da aquisição, número de analistas, contraprestação em ações e o aproveitamento fiscal do goodwill) e outras duas relacionadas ao 2o nível (índice de imobilização e market-to-book ratio do segmento). Individualmente, dentre as variáveis de 1o nível, apenas o número de analistas acompanhando as ações da adquirente apresentou associação com o percentual de goodwill. As interações entre o aproveitamento fiscal e o índice de imobilização médio do segmento com o número de analistas também apresentaram associação. / In 2007, the approval of the Law 11.638 made the adoption of the International Accounting Reporting Standard (IFRS) possible in Brazil. The convergence to the IFRS brought several innovations, among then, the accounting for business combinations, regulated by the Pronunciamento Técnico CPC 15 - Combinações de negócios, which made the acquisition method mandatory. Under this new model, the acquirer measures the identifiable acquired assets and the assumed liabilities by their respective fair values. The goodwill, in turn, is the portion of the fair value of the consideration transferred that are not individually identified, and it is realized exclusively by the impairment test. This thesis aims to identify the determining factors in the percentage of the acquisition cost allocated as goodwill in the business combinations realized and disclosed by the 101 companies which comprises the Índice Brasil Amplo (IBr-A) in the period from 2009 to 2015. It was identified and, in great part, hand collected, data about 442 business combinations, and the 307 observationsin which a goodwill was recognized were effectively used. It was used a multivariate dependency technique known as Hierarchical Linear Models or Multilevel Models (HLM), thathas the fundamental characteristic of capturing the nested data structure, considering the variability within the 39 economic segments of the firms of this study\'s sample. The results indicated the presence of a hierarchical structure, in which the segment that the acquirer operates explains about 15% of the variability in the percentage of acquisition cost allocated as goodwill. During the research five first level variables were tested (variable remuneration percentage of the acquirer\'s directors, acquisition relevance, number of analysts, stock consideration and the goodwill tax allowance), as well as two related to the second level (properties, plants and equipment to total asset and market-to-book value of the segment). Individually, among the first level variables, only the number of analyst following the acquirer shares presented an association with the percentage of goodwill. The interactions between the use of the tax allowance and the properties, plants and equipment to total asset with the number of analyst also presented an association.

Em 2007 foi sancionada a Lei no 11.638, que possibilitou a adoção das Normas Internacionais de Relato Financeiro (International Financial Reporting Standards - IFRS) no Brasil. A convergência às IFRS trouxe diversas inovações, incluindo dentre elas a contabilização das aquisições de empresas, normatizadas pelo Pronunciamento Técnico CPC 15 - Combinações de negócio, que tornou obrigatória a aplicação do método de aquisição. Por esse novo modelo, a entidade adquirente contabiliza os ativos identificáveis adquiridos e os passivos assumidos da adquirida pelos seus respectivos valores justos. Já o ágio por expectativa de rentabilidade futura (goodwill) passa a ser mensurado pela parcela do valor justo da contraprestação transferida que não foi individualmente identificada, sendo realizado exclusivamente por meio do teste de impairment. Esta tese tem o objetivo de identificar fatores determinantes no percentual do custo de aquisição alocado como goodwill nas combinações de negócios realizadas e divulgadas pelas 101 empresas que compõe o Índice Brasil Amplo (IBr-A) durante o período entre 2009 e 2015. Foram identificados e coletados, em grande parte, manualmente, dados sobre 442 combinações de negócios, e utilizaram-se efetivamente as 307 observações em que foi reconhecido goodwill. Foi empregada uma técnica multivariada de dependência conhecida como modelos hierárquicos lineares ou modelos multinível (HLM), cuja característica basilar é a captura da estrutura aninhada dos dados, considerando a variabilidade dos dados dentro dos 39 segmentos econômicos das empresas da amostra deste estudo. Os resultados indicaram a existência de uma estrutura hierárquica, na qual o segmento econômico de atuação da adquirente explicou em torno de 15% da variabilidade no percentual do custo de aquisição alocado como goodwill. Durante a pesquisa foram testadas cinco variáveis relacionadas a fatores de 1o nível (percentual de remuneração variável da diretoria, relevância da aquisição, número de analistas, contraprestação em ações e o aproveitamento fiscal do goodwill) e outras duas relacionadas ao 2o nível (índice de imobilização e market-to-book ratio do segmento). Individualmente, dentre as variáveis de 1o nível, apenas o número de analistas acompanhando as ações da adquirente apresentou associação com o percentual de goodwill. As interações entre o aproveitamento fiscal e o índice de imobilização médio do segmento com o número de analistas também apresentaram associação. / In 2007, the approval of the Law 11.638 made the adoption of the International Accounting Reporting Standard (IFRS) possible in Brazil. The convergence to the IFRS brought several innovations, among then, the accounting for business combinations, regulated by the Pronunciamento Técnico CPC 15 - Combinações de negócios, which made the acquisition method mandatory. Under this new model, the acquirer measures the identifiable acquired assets and the assumed liabilities by their respective fair values. The goodwill, in turn, is the portion of the fair value of the consideration transferred that are not individually identified, and it is realized exclusively by the impairment test. This thesis aims to identify the determining factors in the percentage of the acquisition cost allocated as goodwill in the business combinations realized and disclosed by the 101 companies which comprises the Índice Brasil Amplo (IBr-A) in the period from 2009 to 2015. It was identified and, in great part, hand collected, data about 442 business combinations, and the 307 observationsin which a goodwill was recognized were effectively used. It was used a multivariate dependency technique known as Hierarchical Linear Models or Multilevel Models (HLM), thathas the fundamental characteristic of capturing the nested data structure, considering the variability within the 39 economic segments of the firms of this study\'s sample. The results indicated the presence of a hierarchical structure, in which the segment that the acquirer operates explains about 15% of the variability in the percentage of acquisition cost allocated as goodwill. During the research five first level variables were tested (variable remuneration percentage of the acquirer\'s directors, acquisition relevance, number of analysts, stock consideration and the goodwill tax allowance), as well as two related to the second level (properties, plants and equipment to total asset and market-to-book value of the segment). Individually, among the first level variables, only the number of analyst following the acquirer shares presented an association with the percentage of goodwill. The interactions between the use of the tax allowance and the properties, plants and equipment to total asset with the number of analyst also presented an association.

SammandragGoodwill har de senaste åren fått en allt mer betydelsefull roll i svenska bolag och utgör idag majoriteten av köpeskillingen vid ett rörelseförvärv. Rådande redovisningsstandarder lämnar en stor del av ansvaret för köpeskillingsallokering hos bolagen själva, något som tidigare studier visat ger utrymme för opportunistiskt agerande. Vi undersöker i denna studie 213 rörelseförvärv gjorda på den svenska marknaden under åren 2011-2013. Via en multipel regressionsanalys finner vi belägg för att rörlig ersättning till företagsledare baserad på kortsiktiga resultatmål, tenderar att leda till en högre allokering till goodwill i relation till immateriella tillgångar vid rörelseförvärv. Resultatet kan tolkas som att företagsledare maximerar resultatet ur ett kortsiktigt perspektiv i syfte att också maximera sin egen lön. Detta skapar en problematik då företagsledare som agerar i egenintresse försvagar de kvalitativa karaktäristika IASB efterstävar vid standardsättande. / Abstract Goodwill has over the last years gained a more influential role in Swedish corporations and accounts for a majority of the purchase price during an acquisition. Current accounting standards leave a substantial part of the responsibility of the purchase price allocation to the firms themselves, something that previous studies have found gives room for opportunistic behavior. We study 213 company acquisitions on the Swedish market during the years of 2011-2013. Through a multiple regression analysis we find that short-term compensations based on short-term financial results, tend to lead to a higher allocation to goodwill in relation to intangible assets. These findings could be interpreted as an indication of executives striving to maximize short-term results in order to also maximize their compensation. This creates a problematic situation since executives acting in self-interest diminishes the qualitative characteristics IASB endeavor when setting accounting standards.

This master thesis deals with specifics of valuation, recognition and reporting of intangible assets that were acquired as a business combination under IFRS. This thesis is also devoted to specifics of intangible assets which indicate importance and difficulty of its standardization in accounting. The aim of the master thesis is to combine valuation and accounting standards for intangible assets with emphasis on acquisition process. Practical part is here to show how definitely companies valuate, measure and recognize intangible assets acquired in a business combination.

This thesis focuses on business combinations according to IFRS and Czech accounting regulations. According to IFRS, Purchase Price Allocation (PPA) is a vital tool in acquisition reporting and therefore this paper mainly focuses on it. The theoretical part serves as a solid based for the empirical part, highlighting the main differences within the examined accounting types. The empirical part primarily focuses on setting the purchase price containing a contingent consideration, newly identified intangible assets and contingent liabilities reporting, and also net asset's fair value valuation to the acquisition date. The results show a major difference and drawbacks in using the Czech accounting regulations when solving business combinations.

Goodwill is one of the most complex and unclear concepts within financial accounting; it is uncertain what it represents as an asset, it is only recognized during the creation of business combinations and is subject to impairments. The question becomes therefore what meaning is actually to be made from goodwill’s definite appearance as a financial statement line item? Due to a perceived low relevance by users of financial statements, it can be stated that the current narration by the accounting item goodwill fails to meet the fundamental purpose of accounting. Therefore, a study to bring a comprehensive clarification of the accounting item is required where this study attempts to achieve this objective by studying the acquirers’ perceptions of goodwill. First was a thorough theoretical background established that compiles a wide collection of relevant literature on goodwill. Then were semi-structured interviews conducted with top managers of nine different parent companies who had recently made a corporate acquisition. Based on the most salient perceptions derived from the empirical data in relation to the comprehensive theoretical background, this study obtained the following findings. Goodwill can be understood through three central aspects: the underlying objective reality as an intangible asset, the PPA process and the subsequential measurement process. In relation to the two latter aspects could a fourth aspect of managers’ influence be derived. In an overarching integration, these four aspects could be synthesized into a final holistic model of the accounting item goodwill. This model iii ultimately represents a comprehensive understanding of the current accounting item goodwill in financial statements based on the perceptions of acquirers. The findings of this study can be used to bring clarity to the users of financial statements when interpreting goodwill and therefore potentially increase its perceived relevance. Foremost can this study’s holistic model be used as a guideline for future research to further elaborate on the understanding of goodwill and generate improvements to its current accounting design.

The diploma thesis deals with valuation of two types of intangible property in context on financial reporting, specifically purchase price allocation according to IAS/IFRS. The theoretical part describes the framework and specifics of valuation for financial reporting purposes and the basic valuation approaches and methods. An emphasis is placed on the multi-period excess earnings method, which is typically used for valuation of exotic intangible assets. In the practical part there is a demonstration of valuation of customer relationships in the banking sector by the multi-period excess earnings method and valuation of assembled workforce, including a discussion of potential weak points and possible variations of the commonly used income-based valuation method.