ANALYSIS OF CHANGES IN THE GOODWILL VALUE IN MERGERS AND ACQUISITIONS

Abstract

Due to the recent increase in the number of Russian companies reporting on the basis of international accounting standards, the Goodwill started being mentioned quite frequently. This article reveals the meaning of the "goodwill" and concludes that the traditional-for-Russian-law concept of "goodwill" is narrower in relation to the term “goodwill”. The issues of reflection of this asset in accounting in accordance with IFRS and RAS are brought to light. Based on the analysis of financial statements of the array of companies that completed mergers and acquisitions in the period from 2008 to 2015, a sample of enterprises is presented, reflecting the Goodwill value in the year of the transaction and the dynamics of devaluation in the next two years. The profitability indicators of the allocated companies are estimated. In order to ensure the comparability of data used in the calculations and analysis, the monetary values are converted to ruble equivalent at the rate of Bank of Russia, further using the price index to one-year period. The relationship in the changes between the Goodwill values in mergers and acquisitions and profitability ratios of the company-buyer after one- and two-year periods after the transaction are studied.