EARNINGS QUALITY AND GOODWILL FROM BUSINESS COMBINATIONS

Abstract

Goodwill from business combination of the company can indicate the return. With companies that have high popularity will have a high value of the company. However, in paying the excess amount over the fair value of the net assets of the acquired entity. Maybe due to incorrect valuation of the business or due to the management's decision to buy the business at a high price in order to be the owner of the entire business. According to studies, it has been found that goodwill from business integration is related to profit quality which the measure of profit quality is not the final answer to indicate the operational efficiency of the entire business, but only part that is used for consideration. The users of information from financial statements or investors must carefully study the information and analysis.