Goodwill in the Bank Accounting’s Praxis
Goodwill in the Bank Accounting’s Praxis

Summary/Abstract: Goodwill is a specific intangible asset, resulting after a merger or acquisition asa positive difference between the purchase price of the merged or acquired entity andthe fair value of its net assets. Although the goodwill’s share in the sum of total assets isrelatively small in most cases, its impairment can exert a considerable negative impact onthe profit figure, due to the necessity of creating a proper provision in charge of costs. The described examples of testing procedures disclosed in financial reports of several Polishcommercial banks show that the impairment testing methodology is too complex, comparing with the practical utility. Moreover, it is based on non-standardised assumptions,impacting negatively the test reliability and comparability of results.

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