{"id":1705,"date":"2025-01-02T07:51:28","date_gmt":"2025-01-02T07:51:28","guid":{"rendered":"https:\/\/www.hashmicro.com\/my\/blog\/?p=1705"},"modified":"2026-02-19T01:13:02","modified_gmt":"2026-02-19T01:13:02","slug":"goodwill-accounting","status":"publish","type":"post","link":"https:\/\/www.hashmicro.com\/my\/blog\/goodwill-accounting\/","title":{"rendered":"Goodwill Accounting 101: What It Is, How It Works, and Uses"},"content":{"rendered":"<p>Did you know <a href=\"https:\/\/www.emerald.com\/insight\/content\/doi\/10.1108\/19852510980000642\/full\/html\" target=\"_blank\" rel=\"noopener\">goodwill accounting in Malaysia<\/a> used to have no strict rules at all? Before adopting global standards, companies followed a loose approach, often leaving goodwill values unclear and inconsistent.<\/p>\n<p>That all changed with the introduction of FRS 136 \u2013 a detailed and technical framework for the impairment of assets. While Malaysia\u2019s move to adopt IFRS showed a strong commitment to global standards, many companies struggled to keep up.<\/p>\n<p>Reports fell short of expectations, revealing the challenges of adapting to these new, complex rules. Therefore, businesses must deepen their understanding of managing goodwill effectively. Read this article to find out more about goodwill accounting!<\/p>\n<table style=\"border-collapse: collapse; background-color: #fffacd; box-shadow: 0 4px 8px rgba(0, 0, 0, 0.1); border-radius: 25px 25px 25px 25px;\" width=\"100%\">\n<tbody>\n<tr>\n<td style=\"padding: 15px; border: none;\">\n<h3 style=\"margin-bottom: 10px;\"><span style=\"background-color: #990000; color: #ffffff; padding: 5px;\"><b>Key Takeaways<\/b><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">In Malaysia, goodwill accounting has come a long way, moving from loose practices to stricter rules under FRS 136 and IFRS standards.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Goodwill refers to the extra value a company pays during an acquisition, covering intangible assets like brand reputation and customer loyalty.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Managing goodwill can be challenging, especially when it comes to calculating fair market values and conducting regular impairment tests.<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">With HashMicro\u2019s <a href=\"https:\/\/www.hashmicro.com\/my\/blog\/best-accounting-software\/\">accounting software<\/a>, businesses can handle goodwill accounting effortlessly, thanks to its advanced and user-friendly features.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-sheets-root=\"1\"><!-- <div id=\"toc_group_article\" style=''>\r\n\t<p style='font-size:25px;font-weight:bold; margin-bottom:0px'>\r\n\t\tTable of Content\r\n\t<\/p>\r\n\t<ul id=\"list_toc\" class='list_toc'><\/ul>\r\n<\/div>\r\n\r\n<div class=\"dropdown-fixed-top\" id=\"dropdown-fixed-top\">\r\n\t<div class=\"row\">\r\n\t\t<p id=\"pilihDaftarIsi\">Content Lists<\/p>\r\n\t\t<p><i class=\"td-icon-menu-down\"><\/i><\/p>\r\n\t<\/div>\r\n\t\r\n\t<div>\r\n\t\t<ul id=\"list_toc_top\" class='list_toc'><\/ul>\r\n\t<\/div>\r\n<\/div> -->\r\n\r\n<!-- TOC mobile -->\r\n<div id=\"placeholder-toc\"><\/div>\r\n<div id=\"toc\">\r\n    <div class=\"header\">\r\n\t<span class=\"toc-title\" id=\"toc-title\">Table of Content<\/span>\t\r\n\t <i class=\"toc-icon\">\r\n        <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"30\" height=\"30\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"#000\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\" class=\"header-icon\">\r\n          <path d=\"m6 9 6 6 6-6\" \/>\r\n        <\/svg>\r\n      <\/i>\r\n\t<\/div>\r\n    <div class=\"list\">\r\n      <ul id=\"toc-list\"><\/ul>\r\n    <\/div>\r\n <\/div>\r\n<!-- TOC mobile -->\r\n\r\n<style>\r\n\t@media (max-width: 992px) {\r\n\t\t#toc_group_article {\r\n\t\t\tpadding-top: 24px;\r\n\t\t}\r\n\t}\r\n\t\r\n\t#list_toc_float {\r\n\t\tmax-height: calc(100vh - 250px);\r\n\t\toverflow-y: auto;\r\n\t}\r\n\t\r\n\t#list_toc_top {\r\n\t\tdisplay: none;\r\n\t\tbackground: #fff;\r\n\t\tmargin-bottom: 4px;\r\n\t}\r\n\t\r\n\t#list_toc_top li {\r\n\t\tdisplay: block;\r\n\t\tmargin-left: 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7px}\r\n\t#list_toc_float li a {\r\n\t\tdisplay: block;\r\n\t\tcolor: #000;\r\n\t\tmargin-bottom: 6px;\r\n\t\tpadding-top: 2px;\r\n\t\tpadding-bottom: 2px;\r\n\t\ttransition: all 0.2s ease-in-out;\r\n\t\tfont-size: 15px;\r\n\t\tline-height: 18px;\r\n\t}\r\n\t#list_toc_float li{list-style:none;list-style-position:inside; margin-left:0;}\r\n\t#list_toc_float a:hover{color:#b1252d;}\r\n\t\r\n\t#toc_group_float{\r\n\t\tline-height: 24px;\r\n\t\tmax-height: calc(100vh - 100px);\r\n\t\toverflow: auto;\r\n\t\tz-index: 99;\r\n\t\tdisplay:none!important;\r\n\t\tbackground:#fff;\r\n\t\ttransition:all 0.5s linear\r\n\t}\r\n\t\r\n\t@media (min-width:1019px){\r\n\t\t#toc_group_float {\r\n\t\t\tdisplay:block!important;\r\n\t\t\t}\r\n\t\t\t\t#toc_group_article {\r\n\t\t\tdisplay:none;\r\n\t\t}\r\n\t}\r\n\r\n<\/style>\r\n\r\n<!-- START ToC styling  -->\r\n<style>\r\n\t\/* Simple styling for the TOC *\/\r\n\t\r\n\t#toc ul li:last-child {\r\n    padding-bottom: 16px; \/* Adjust the value as needed *\/\r\n}\r\n\r\n.td-fix-index {\r\n\t transform: unset !important;\r\n     -webkit-transform: unset !important; \r\n}\r\n.footer-contact .td-fix-index {\r\n\t transform: translateZ(0) !important;\r\n     -webkit-transform: translateZ(0) !important; \r\n}\r\n\t.tdb_single_content .tdb-block-inner.td-fix-index{\r\n\t\tposition: static;\r\n\t}\r\n\t\r\n\r\n\t\r\n#toc {\r\n  background-color: #FFF;\r\n\tpadding: 17px 24px 0px 24px !important;\r\n  margin-bottom: 20px;\r\n\/*   border: 1px solid #9C171E; *\/\r\n  border-radius: 6px;\r\n\tdisplay: none;\r\n  max-width: 100%;\r\n  transition: .4s ease height;\r\n\tmargin-left: 0;\r\n\toverflow: hidden;\r\n}\r\n\r\n#toc .header{\r\n  display: flex;\r\n  align-items: center;\r\n  justify-content: space-between;\r\n\tbackground-color: transparent;\r\n}\r\n\t\r\n\t#toc.sticky .header{\r\n\t\tpadding: 4px 0;\r\n\t}\r\n\t\r\n.header p{\r\n  font-size: 18px !important;\r\n  font-weight: 600 !important;\r\n  color: #393939;\r\n   margin-bottom: 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!important;\r\n}\r\n\t\r\n\t.td-post-content #toc-list li:hover a, .td-post-content #toc-list a.active{\r\n\t\tcolor: #9C171E !important;\r\n\t\tfont-weight: 600 !important;\r\n\t}\r\n\t\r\n.td-post-content #toc-list a.active{\r\n\tfont-weight: bold !important;\r\n\tcolor: #9C171E !important;\r\n}\r\n\t\r\n#toc a, .td-post-content #toc-list a {\r\n  text-decoration: none;\r\n  color: #ea1717 !important;\r\n  transition: .2s ease;\r\n\tfont-weight: 400 !important;\r\n\tdisplay: block;\r\n\t\r\n\tpadding: 4px 16px 4px 0;\r\n}\r\n\r\n#toc.sticky {\r\n  position: fixed;\r\n\/*   top: 73px; *\/\r\n\tbottom: 0;\r\n  z-index: 100; \r\n  box-shadow: 0 2px 5px rgba(0,0,0,0.1); \r\n\twidth: 100%; \r\n\tbackground-color: #FFF;\r\n\/* \tbackground-color: #FFF1F1; *\/\r\n\tborder-bottom: 1px solid #ea1717;\r\n\/*   border: 1px solid #393939; *\/\r\n  box-shadow: 0px 0px 14px 0px #00000040;\r\n  cursor: pointer;\r\n\tanimation: fadein .3s ease;\r\n\tpadding: 12px 16px !important;\r\n}\r\n\t\r\n\t.fadein{\r\n\t\tanimation: fadein .3s ease;\r\n\t}\r\n\t\r\n\t.fadeout{\r\n\t\tanimation: fadeout .3s ease;\r\n\t}\r\n\t\r\n\t\r\n\t@keyframes fadein{\r\n\t\t0% {\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@keyframes fadeout{\r\n\t\t0% {\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t}\r\n\r\n\t\r\n#toc.sticky .header p{\r\n\tmargin-bottom: 10px;\r\n\tmargin-top: 10px;\r\n}\r\n\r\n#toc.sticky .toc-icon{\r\n  visibility: visible;\r\n\/* \ttransition: 0.4s ease; *\/\r\n}\r\n\t\r\n\t.toc-icon{\r\n\t\talign-items: center;\r\n    \tdisplay: flex;\r\n\t}\r\n\t\r\n\tsvg.header-icon{\r\n\/* \t\tbackground-color: #9c171e; *\/\r\n\t\tbackground-color: #FFF;\r\n\t\tborder-radius: 30px;\r\n\t\tpadding: 5px;\r\n\t}\r\n\r\n#toc.sticky .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\t\r\n\t#toc .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\r\n#toc .header.active .toc-icon{\r\n\ttransform: rotate(0deg); \r\n\topacity: 1;\r\n}\r\n\r\n\t#toc .header.active + .list {\r\n\t  max-height: 200px; \/* Adjust this value as needed *\/\r\n\t  opacity: 1;\r\n\t}\r\n\t\r\n\t#placeholder-toc{\r\n\/* \t\tdisplay: none; *\/\r\n\t}\r\n\t\r\n\t@media (min-width: 768px) and (max-width: 991px){\r\n\t\t#toc.sticky{\r\n\/* \t\t\ttop: 104px; *\/\r\n\t\t\tbottom: 0px;\r\n\t\t}\r\n\t\t\r\n\t\t#toc{\r\n\t\t\twidth: unset !important;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@media (max-width: 767px){\r\n\t\t#toc{\r\n\t\t\twidth: 100% !important;\r\n\t\t\tdisplay: inline-block;\r\n\t\t}\r\n\t\t\r\n\t\t#toc.sticky{\r\n\t\t\twidth: 90% !important;\r\n\/* \t\t\ttop: 81px; *\/\r\n\t\t\tbottom: 60px;\r\n\t\t\tmargin-left: auto;\r\n\t\t\tmargin-right: auto;\r\n\t\t\tpadding: 0 16px;\r\n\t\t\tright: 5%;\r\n\t\t}\r\n\t}\r\n\t\r\n\t<\/style>\r\n<!-- END ToC styling  -->\r\n\r\n<!-- ToC List for mobile -->\r\n<script>\r\n \/\/ Generate TOC based on headings\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  \/\/ Get the element that will contain the TOC\r\n  const tocList = document.getElementById('toc-list');\r\n\r\n  \/\/ Get the element with the ID 'article-left'\r\n  const article = document.querySelector('.td-post-content');\r\n\r\n  \/\/ Find all h2 elements within 'myarticle'\r\n  const headers = article.getElementsByTagName('h2');\r\n\r\n  \/\/ Loop through the h2 elements and create a list item for each one\r\n  for (let i = 0; i < headers.length; i++) {\r\n    const header = headers[i];\r\n    const headerText = header.textContent;\r\n\/\/     const headerId = 'header-' + i;\r\n    const headerId = headerText\r\n    .toLowerCase()\r\n    .trim()\r\n    .replace(\/[^\\w\\s-]\/g, '')  \/\/ hapus tanda baca\r\n    .replace(\/\\s+\/g, '-'); \/\/ ganti spasi jadi \"-\"\r\n\r\n    \/\/ Set an ID for the header if it doesn't have one\r\n    header.setAttribute('id', headerId);\r\n\r\n    \/\/ Create a list item for the TOC\r\n    const listItem = document.createElement('li');\r\n\r\n    \/\/ Create a link for the list item\r\n    const link = document.createElement('a');\r\n    link.setAttribute('href', '#' + headerId);\r\n    link.textContent = headerText;\r\n\r\n    \/\/ Append the link to the list item\r\n    listItem.appendChild(link);\r\n\r\n    \/\/ Append the list item to the TOC list\r\n    tocList.appendChild(listItem);\r\n  }\r\n});\r\n\r\n\/\/ Keep height and placement of content using placeholder in place of TOC\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const placeholderToc = document.querySelector('#placeholder-toc');\r\n\r\n  function setPlaceholderHeight() {\r\n    placeholderToc.style.height = `${toc.offsetHeight}px`;\r\n  }\r\n\r\n  \/\/ Set the initial height of the placeholder\r\n  setPlaceholderHeight();\r\n\r\n  \/\/ Update the height on window resize\r\n  window.addEventListener('resize', setPlaceholderHeight);\r\n});\r\n  const tocTitle = document.querySelector('#toc-title'); \/\/ Assuming header-faq is the element for TOC title\r\n\r\n\/\/ Sticky TOC and update heading\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const footer = document.querySelector('.td-footer-template-wrap');\r\n  const tocParent = toc.parentElement;\r\n  const divTop = tocParent.getBoundingClientRect().top + window.pageYOffset;\r\n  const tocHeight = toc.offsetHeight;\r\n  const triggerPoint = divTop + tocHeight + 700;\r\n  const footerHeight = footer.offsetHeight;\r\n  const triggerFooterPoint = footer.getBoundingClientRect().top + window.pageYOffset - footerHeight - footerHeight - footerHeight;\r\n  const phtoc = document.querySelector('#placeholder-toc');\r\n  const headers = document.querySelectorAll('.td-post-content h2');\r\n  const navLinks = document.querySelectorAll('#toc-list a');\r\n\t\r\n\tconst panel2 = document.querySelector(\"#toc .list\");\r\n\tvar icon = document.querySelector(\".toc-icon\");\r\n\r\n  let activeLink = null; \/\/ Declare activeLink outside the loop\r\n\t\r\n  \/\/ Function to handle scroll and add\/remove .sticky class\r\n  function handleScroll() {\r\n    const windowTop = window.pageYOffset || document.documentElement.scrollTop;\r\n    let currentHeader = '';\r\n\r\n    \/\/ Highlight user progress as the heading comes\r\n    headers.forEach(header => {\r\n\t\tconst headerTop = header.offsetTop;\r\n\t\tconst headerHeight = header.clientHeight;\r\n\t\tif (window.scrollY >= (headerTop - headerHeight + 700)) {\r\n\t\t\tconst currentHeaderId = header.getAttribute('id');\r\n\t\t\tconst currentHeaderText = document.getElementById(currentHeaderId).textContent;\r\n\/\/ \t\t\tconsole.log(\"current header text:\", currentHeaderText);\r\n\t\t\ttocTitle.textContent = currentHeaderText;\r\n\t\t\tcurrentHeader = currentHeaderId;\r\n\t\t\t\r\n\t\t\tif(window.innerWidth < 767){\r\n\t\t\t\ttocTitle.textContent = 'Table of Content';\r\n\t\t\t}\r\n\t\t}\r\n\t});\r\n\r\n    navLinks.forEach(link => {\r\n      link.classList.remove('active');\r\n      if(currentHeader != '') {\r\n\t\t  if (link.getAttribute('href').includes(currentHeader)) {\r\n\t\t\t  link.classList.add('active');\r\n\t\t  }\r\n\t  }\r\n    });\r\n\/\/     if (windowTop < triggerFooterPoint) {\r\n\/\/         toc.style.display = 'block';\r\n\/\/ \t}else{\r\n\/\/         toc.style.display = 'none';\r\n\/\/ \t}\r\n    \/\/ Update TOC title if sticky\r\n    if (windowTop > triggerPoint) {\r\n      if (!toc.classList.contains('sticky')) {\r\n        phtoc.style.display = \"block\";\r\n        toc.classList.add('sticky');\r\n        toc.style.width = `${tocParent.offsetWidth}px`; \/\/ Set width to match the parent element\r\n        toc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n        toc.style.backgroundColor = \"#FFF\";\r\n\t\tpanel2.style.height = '0px';\r\n\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\t\t  if(window.innerWidth < 767){\r\n\/\/ \t\t\t  const tocs = document.querySelector('#toc.sticky');\r\n\t\t\t  tocTitle.textContent = 'Table of Content'; \/\/ Reset title\r\n       \t\t  toc.style.width = '150px'; \/\/ Set width to match the parent element\r\n\t\t  }\r\n      }\r\n      if (currentHeader) {\r\n\/\/         console.log(\"activeLink:\", activeLink);\r\n        if (activeLink) {\r\n\/\/           tocTitle.textContent = activeLink.textContent; \/\/ Update TOC title\r\n          tocTitle.textContent = activeLink ? activeLink.textContent : \"\"; \/\/ Update title only if activeLink exists\r\n        }\r\n      }\r\n    } else {\r\n      toc.classList.remove('sticky');\r\n      phtoc.style.display = \"none\";\r\n      toc.style.width = 'unset'; \/\/ Reset to original width\r\n      toc.style.backgroundColor = \"#FFF\";\r\n      tocTitle.textContent = 'Table of Content'; \/\/ Reset title\r\n\t\tpanel2.style.height = panel2.scrollHeight + \"px\";\r\n\t\ticon.style.transform = \"rotate(180deg)\";\r\n    }\r\n  }\r\n\r\n    \/\/ Attach the scroll event listener to the window\r\n    window.addEventListener('scroll', handleScroll);\r\n\r\n    \/\/ Initial call to handleScroll to set the correct state on load\r\n    handleScroll();\r\n});\r\n\t\r\n\t\/\/ Open toggle TOC\r\n\t  document.addEventListener(\"DOMContentLoaded\", function() {\r\n\t\tvar tocHeader = document.querySelector(\"#toc .header\");\r\n\t\tvar toc = document.querySelector(\"#toc\");\r\n\t\tvar icon = document.querySelector(\".toc-icon\");\r\n\t\tconst tocTitle = document.querySelector('#toc-title');\r\n\t\tconst tocs = document.querySelector('#toc.sticky');\r\n \t\tconst tocParent = toc.parentElement;\t\t  \r\n\r\n\t\t  tocHeader.addEventListener(\"click\", function() {\r\n\t\t\tvar panel = this.nextElementSibling;\r\n\t\t\tif (panel.style.height !== '0px') { \/\/ Check if height is not 0px\r\n\t\t\t  panel.style.height = '0px'; \/\/ Set height to 0 for full collapse\r\n\t\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\/\/ \t\t\t\ttoc.style.paddingBottom = '6px'; \r\n\t\t\t\tif(window.innerWidth > 768){\r\n\t\t\t\t\tif(!toc.classList.contains('sticky')){\r\n\t\t\t\t\t\ttoc.style.width = \"unset\";\r\n\/\/ \t\t\t\t\t\ttoc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n\t\t\t\t\t}\r\n\t\t\t\t\tif (toc.classList.contains('sticky')){\r\n\t\t\t\t\t\ttoc.style.width = '${tocParent.offsetWidth}px';\r\n\t\t\t\t\t\ttoc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n\t\t\t\t\t}\r\n\t\t\t\t}\r\n\t\t\t\tif(window.innerWidth < 767){\r\n\t\t\t\t\ttoc.style.width = \"unset\"; \/\/ Reset width\r\n\t\t\t\t}\r\n\t\t\t\ttoc.style.backgroundColor = \"#FFF1F1\";\r\n\t\t\t} else {\r\n\t\t\t  panel.style.height = panel.scrollHeight + \"px\";\r\n\t\t\t  icon.style.transform = \"rotate(0deg)\";\r\n\t\t\t  toc.style.backgroundColor = \"#FFF\";\r\n\t\t\t  tocTitle.textContent = 'Table of Content'; \/\/ Reset title\r\n\t\t\t\ttoc.style.paddingBottom = '24px';\r\n\t\t\t \tif(window.innerWidth < 767){\r\n\t\t\t\t\ttoc.style.width = `${tocParent.offsetWidth}px`; \/\/ Set width to match the parent element\r\n\t\t\t\t\ttoc.setAttribute('style', 'width: ' + tocParent.offsetWidth + 'px !important;');\r\n\t\t\t\t}\r\n\t\t\t}\r\n\t\t  });\r\n\r\n\t\t  \/\/ Close TOC when a link inside it is clicked\r\n\t\t  var tocLinks = document.querySelectorAll(\"#toc .list a\");\r\n\t\t  tocLinks.forEach(function(link) {\r\n\t\t\tlink.addEventListener(\"click\", function() {\r\n\t\t\t  var panel = document.querySelector(\"#toc .list\");\r\n\t\t\t  panel.style.height = '0px'; \/\/ Set height to 0 for full collapse\r\n\t\t\t  icon.style.transform = \"rotate(180deg)\";\r\n\t\t\t  toc.style.backgroundColor = \"#FFF\";\r\n\t\t\t});\r\n\t\t  });\r\n\t\t});\r\n<\/script>\r\n\r\n<!-- <script>\r\n\tvar pilihDaftarIsi = document.getElementById('pilihDaftarIsi');\r\n\t\r\n\tdocument.addEventListener('DOMContentLoaded', function() {\r\n\t\tvar dropdownFixedTop = document.querySelector('.dropdown-fixed-top');\r\n\r\n\t\tdropdownFixedTop.addEventListener('click', function() {\r\n\t\t\tvar dropdownContent = this.querySelector('.list_toc');\r\n\t\t\tdropdownContent.classList.toggle('show');\r\n\t\t});\r\n\r\n\t\twindow.addEventListener('click', function(event) {\r\n\t\t\tvar listTocTop = document.getElementById('list_toc_top');\r\n\r\n\t\t\tif (!dropdownFixedTop.contains(event.target)) {\r\n\t\t\t\tlistTocTop.classList.remove('show');\r\n\t\t\t}\r\n\t\t});\r\n\t});\r\n\t\r\n\tvar daftarIsiContainer = document.getElementById('toc_group_article');\r\n\tvar dropdownFixedTop = document.getElementById('dropdown-fixed-top');\r\n    var triggered = false; \/\/ Flag to keep track of whether the function has been triggered\r\n\r\n    window.addEventListener('scroll', function() {\r\n        if (!triggered && isCompletelyScrolledPast(daftarIsiContainer)) {\r\n            showSectionDropdownFixedTop(false);\r\n            triggered = true;\r\n        } else if (triggered && !isCompletelyScrolledPast(daftarIsiContainer)) {\r\n            showSectionDropdownFixedTop(true);\r\n            triggered = false;\r\n        }\r\n    });\r\n\r\n    function isCompletelyScrolledPast(element) {\r\n        var elementTop = element.getBoundingClientRect().top;\r\n        var elementBottom = element.getBoundingClientRect().bottom;\r\n        return elementTop < 0 && elementBottom < 0;\r\n    }\r\n\r\n    function showSectionDropdownFixedTop(show) {\r\n\t\tif (show) {\r\n\t\t\tdropdownFixedTop.classList.remove(\"show\");\r\n\t\t} else {\r\n\t\t\tdropdownFixedTop.classList.add(\"show\");\r\n\t\t}\r\n    }\r\n\r\n\/\/ Scrollspy function to highlight the active TOC item based on the scroll position\r\n  function scrollSpy(tocClass) {\r\n    const scrollPosition = window.scrollY;\r\n\r\n    \/\/ Find the active h2 and h3 headings based on their position in the corresponding TOC\r\n    let activeH2 = null;\r\n    let activeH3 = null;\r\n\r\n    const tocItems = document.querySelectorAll(`.${tocClass} li`);\r\n    tocItems.forEach(item => {\r\n      const a = item.querySelector('a');\r\n      if (!a) return;\r\n      const href = a.getAttribute('href');\r\n      const targetId = href.substring(1); \/\/ Remove the '#' from the href to get the target ID\r\n      const targetElement = document.getElementById(targetId);\r\n      if (!targetElement) return;\r\n\r\n      const targetTop = targetElement.getBoundingClientRect().top + scrollPosition;\r\n      const nextItem = item.nextElementSibling;\r\n      const nextTop = nextItem ? nextItem.getBoundingClientRect().top + scrollPosition : Infinity;\r\n\r\n      if (targetTop <= scrollPosition + 150) {\r\n        if (a.parentElement.parentElement === tocItems) {\r\n          \/\/ The h2 heading is at the root level of the TOC\r\n          activeH2 = { id: targetId, level: 'h2' };\r\n        } else {\r\n          \/\/ The h3 heading is nested under an h2 heading\r\n          const parentH2 = a.parentElement.parentElement.previousElementSibling;\r\n          if (parentH2) {\r\n            const h2Link = parentH2.querySelector('a');\r\n            if (h2Link) {\r\n              const h2Href = h2Link.getAttribute('href');\r\n              const h2Id = h2Href.substring(1);\r\n              activeH2 = { id: h2Id, level: 'h2' };\r\n            }\r\n          }\r\n          activeH3 = { id: targetId, level: 'h3' };\r\n        }\r\n      }\r\n\r\n      if (targetTop > scrollPosition + 150 && nextTop > scrollPosition + 150 && !activeH3) {\r\n        \/\/ Reset the activeH2 when there are no more active h3 headings\r\n        activeH2 = null;\r\n      }\r\n    });\r\n\r\n    \/\/ Update the active state for the TOC items\r\n    tocItems.forEach(item => {\r\n      item.classList.remove('active');\r\n      const a = item.querySelector('a');\r\n      if (a) {\r\n        const href = a.getAttribute('href');\r\n        const targetId = href.substring(1);\r\n        if ((activeH2 && activeH2.id === targetId) || (activeH3 && activeH3.id === targetId)) {\r\n          item.classList.add('active');\r\n\t\t  pilihDaftarIsi.innerHTML = a.textContent;\r\n        }\r\n      }\r\n    });\r\n  }\r\n\r\n  \/\/ Call scrollSpy for each TOC on window scroll\r\n  const tocClasses = ['list_toc', 'list_toc_float', 'list_toc_top']; \/\/ Add other TOC class names here if you have more than two instances\r\n  tocClasses.forEach(tocClass => {\r\n    window.addEventListener('scroll', () => scrollSpy(tocClass));\r\n  });\r\n<\/script> -->\r\n<!-- END script lama -->\r\n\t\r\n<script>\r\n    \/\/ Scrollspy function to highlight the active TOC item based on the scroll position\r\n  function scrollSpy(tocClass) {\r\n    const scrollPosition = window.scrollY;\r\n\r\n    \/\/ Find the active h2 and h3 headings based on their position in the corresponding TOC\r\n    let activeH2 = null;\r\n    let activeH3 = null;\r\n\r\n    const tocItems = document.querySelectorAll(`.${tocClass} li`);\r\n    tocItems.forEach(item => {\r\n      const a = item.querySelector('a');\r\n      if (!a) return;\r\n      const href = a.getAttribute('href');\r\n      const targetId = href.substring(1); \/\/ Remove the '#' from the href to get the target ID\r\n      const targetElement = document.getElementById(targetId);\r\n      if (!targetElement) return;\r\n\r\n      const targetTop = targetElement.getBoundingClientRect().top + scrollPosition;\r\n      const nextItem = item.nextElementSibling;\r\n      const nextTop = nextItem ? nextItem.getBoundingClientRect().top + scrollPosition : Infinity;\r\n\r\n      if (targetTop <= scrollPosition + 150) {\r\n        if (a.parentElement.parentElement === tocItems) {\r\n          \/\/ The h2 heading is at the root level of the TOC\r\n          activeH2 = { id: targetId, level: 'h2' };\r\n        } else {\r\n          \/\/ The h3 heading is nested under an h2 heading\r\n          const parentH2 = a.parentElement.parentElement.previousElementSibling;\r\n          if (parentH2) {\r\n            const h2Link = parentH2.querySelector('a');\r\n            if (h2Link) {\r\n              const h2Href = h2Link.getAttribute('href');\r\n              const h2Id = h2Href.substring(1);\r\n              activeH2 = { id: h2Id, level: 'h2' };\r\n            }\r\n          }\r\n          activeH3 = { id: targetId, level: 'h3' };\r\n        }\r\n      }\r\n\r\n      if (targetTop > scrollPosition + 150 && nextTop > scrollPosition + 150 && !activeH3) {\r\n        \/\/ Reset the activeH2 when there are no more active h3 headings\r\n        activeH2 = null;\r\n      }\r\n    });\r\n\r\n    \/\/ Update the active state for the TOC items\r\n    tocItems.forEach(item => {\r\n      item.classList.remove('active');\r\n      const a = item.querySelector('a');\r\n      if (a) {\r\n        const href = a.getAttribute('href');\r\n        const targetId = href.substring(1);\r\n        if ((activeH2 && activeH2.id === targetId) || (activeH3 && activeH3.id === targetId)) {\r\n          item.classList.add('active');\r\n        }\r\n      }\r\n    });\r\n  }\r\n\r\n  \/\/ Call scrollSpy for each TOC on window scroll\r\n  const tocClasses = ['list_toc', 'list_toc_float', 'list_toc_top']; \/\/ Add other TOC class names here if you have more than two instances\r\n  tocClasses.forEach(tocClass => {\r\n    window.addEventListener('scroll', () => scrollSpy(tocClass));\r\n  });\r\n<\/script>\r\n\t\r\n\r\n<!-- ToC List for desktop side bar, diganti jadi inject by php, di code snippet \"Sidebar Accordion\" -->\r\n<!-- <script>\r\n\tdocument.addEventListener('DOMContentLoaded', function() {\r\n        \/\/ Fungsi untuk mengubah teks menjadi format id\r\n        function formatId(text) {\r\n            return text.trim().replace(\/[^\\w\\d]+\/g, '_');\r\n        }\r\n\r\n        \/\/ Fungsi untuk membuat nested list\r\n        function createNestedList(parentNode, children) {\r\n            if (children.length === 0) return;\r\n\r\n            const nestedUl = document.createElement('ul');\r\n            children.forEach(child => {\r\n                const nestedLi = document.createElement('li');\r\n                const nestedA = document.createElement('a');\r\n                nestedA.textContent = child.title;\r\n                nestedA.href = `#${child.id}`;\r\n                nestedLi.appendChild(nestedA);\r\n                nestedUl.appendChild(nestedLi);\r\n\r\n                if (child.children.length > 0) {\r\n                    createNestedList(nestedLi, child.children);\r\n                }\r\n            });\r\n\r\n            parentNode.appendChild(nestedUl);\r\n        }\r\n\r\n        \/\/ Membuat objek untuk menyimpan daftar h2 dan h3 beserta judulnya\r\n        const headings = [];\r\n\r\n           \/\/ Mengambil semua elemen h2 dan h3\r\n        const elements = document.querySelectorAll('.td-post-content h2');\r\n\t\t\t\/\/, .td-post-content h3\r\n\r\n        elements.forEach(element => {\r\n            if (element.tagName === 'H2') {\r\n                const id = formatId(element.textContent);\r\n                element.id = id;\r\n\t\t\t\tif(element.textContent.toLowerCase() === \"key takeaways\") {return;} \/\/ Biar ga nampilin Key Takeaways di ToC\r\n                headings.push({ level: 'h2', id: id, title: element.textContent, children: [] });\r\n            } else if (element.tagName === 'H3') {\r\n                const id = formatId(element.textContent);\r\n                element.id = id;\r\n                if (headings.length > 0) {\r\n                    headings[headings.length - 1].children.push({ level: 'h3', id: id, title: element.textContent, children: [] });\r\n                }\r\n            }\r\n        });\r\n\r\n        \/\/ Membuat list HTML dari objek headings\r\n        const ul = document.getElementById('list_toc');\r\n        let currentUl = ul;\r\n        headings.forEach(heading => {\r\n            const li = document.createElement('li');\r\n            const a = document.createElement('a');\r\n            a.textContent = heading.title;\r\n            a.href = `#${heading.id}`;\r\n            li.appendChild(a);\r\n\r\n            if (heading.level === 'h2') {\r\n                \/\/ Menyimpan ul saat ini untuk menambahkan nested ul\r\n                currentUl = li;\r\n                ul.appendChild(li);\r\n            } else if (heading.level === 'h3') {\r\n                if (!currentUl.lastElementChild || currentUl.lastElementChild.tagName !== 'UL') {\r\n                    \/\/ Jika belum ada nested ul, buat satu\r\n                    const nestedUl = document.createElement('ul');\r\n                    currentUl.appendChild(nestedUl);\r\n                    currentUl = nestedUl;\r\n                }\r\n                currentUl.appendChild(li);\r\n            }\r\n\r\n            createNestedList(li, heading.children);\r\n        });\r\n\t\t\/\/ Dapatkan elemen ul dengan id 'list_toc_float'\r\nconst ulFloat = document.getElementById('list_toc');\r\nconst ulJourney = document.getElementById('list_journey');\r\n\r\n\/\/ Dapatkan isi (child elements) dari ul dengan id 'list_toc_float'\r\n\tif (ulFloat !== null) {\r\n\t\tconst clonedChildren = ulFloat.cloneNode(true).children;\r\n\t\tconst ulToc = document.getElementById('list_toc_float');\r\n\t\tconst ulTocTop = document.getElementById('list_toc_top');\r\n\t\tif ((ulToc !== null || ulToc !== undefined) && window.innerWidth > 1018){\r\n\t\t\tulToc.append(...clonedChildren);\r\n\t\t} else {\r\n\t\t\tulTocTop.append(...clonedChildren);\r\n\t\t}\r\n\t} \r\n\r\n\tif (ulJourney !== null) {\r\n\t\tconst clonedChildrenJourney = ulJourney.cloneNode(true).children;\r\n\t\tconst ulTocJourney = document.getElementById('list_toc_journey');\r\n\t\tulTocJourney.append(...clonedChildrenJourney);\r\n\t} \r\n\r\n\r\n\r\n\r\n\t\r\n        \/\/ Fungsi untuk mengambil tinggi navbar\r\n        function getNavbarHeight() {\r\n            const navbar = document.getElementById('tdi_34');\r\n            return navbar ? navbar.offsetHeight : 0;\r\n        }\r\n\r\n        \/\/ Fungsi untuk menambahkan offset posisi scroll\r\n        function scrollToElementWithOffset(elementId) {\r\n            const element = document.getElementById(elementId);\r\n            if (element) {\r\n                const offset = getNavbarHeight();\r\n                const elementPosition = element.getBoundingClientRect().top;\r\n                const offsetPosition = elementPosition - offset-40;\r\n\r\n                window.scrollBy({\r\n                    top: offsetPosition,\r\n                    behavior: 'smooth'\r\n                });\r\n            }\r\n        }\r\n\r\n        \/\/ Fungsi untuk menangani klik pada tautan judul\r\n        function handleTitleClick(event) {\r\n            event.preventDefault();\r\n            const href = event.target.getAttribute('href').substr(1);\r\n            scrollToElementWithOffset(href);\r\n        }\r\n\r\n        \/\/ Tambahkan event listener untuk semua tautan judul\r\n        const titleLinks = document.querySelectorAll('a[href^=\"#\"]');\r\n        titleLinks.forEach(link => {\r\n            link.addEventListener('click', handleTitleClick);\r\n        });\r\n\t});\r\n    <\/script> -->\r\n<!-- \t<style>#toc_group_float{display:block !important}<\/style> -->\r\n<a href=\"https:\/\/www.hashmicro.com\/my\/free-product-demo\/?medium=free-product-demo\" target=\"_blank\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/08\/free-demo-desktop-my.webp\" data-desktop-src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/08\/free-demo-desktop-my.webp\" data-mobile-src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2024\/07\/free-demo-mobile-my.jpg\" alt=\"FreeDemo\" class=\"responsive-image-banner\"><\/a>\r\n\r\n<script>\r\n    \/\/ check which image to use based on screensize\r\n    document.addEventListener(\"DOMContentLoaded\", function() {\r\n        function updateImageSource() {\r\n            var images = document.querySelectorAll('.responsive-image-banner');\r\n            var screenWidth = window.innerWidth;\r\n\r\n            images.forEach(function(img) {\r\n                var mobileSrc = img.getAttribute('data-mobile-src');\r\n                var desktopSrc = img.getAttribute('data-desktop-src');\r\n\r\n                if (screenWidth < 576 && mobileSrc) {\r\n                    img.setAttribute('src', mobileSrc);\r\n                } else {\r\n                    img.setAttribute('src', desktopSrc);\r\n                }\r\n            });\r\n        }\r\n\r\n        \/\/ Initial check\r\n        updateImageSource();\r\n\r\n        \/\/ Update on resize\r\n        window.addEventListener('resize', updateImageSource);\r\n    });\r\n<\/script><\/span><\/p>\n<h2><b>What is Goodwill Accounting?<\/b><\/h2>\n<p>Goodwill accounting is an intangible asset that represents the extra value a company pays when buying another business. This extra amount is above the fair market value of the company\u2019s net assets. Unlike some jurisdictions, the option to amortize goodwill over a specific period is unavailable in Malaysia.<\/p>\n<p>Goodwill includes factors like a strong reputation, loyal customers, brand recognition, skilled employees, and unique technology. While these are valuable assets, they aren\u2019t physical, and their exact value can\u2019t be measured. In <a href=\"https:\/\/www.hashmicro.com\/my\/blog\/retail-accounting\/\">retail accounting<\/a>, these intangible factors often influence how businesses evaluate potential acquisitions.<\/p>\n<p>According to Malaysian Financial Reporting Standards (MFRS), which align with IFRS Standards, goodwill is considered to have an indefinite lifespan and is not amortized. Instead, companies are required to conduct annual impairment tests to ensure its value has not decreased.<\/p>\n<h2><b>Accounting vs. Economic Goodwill<\/b><\/h2>\n<p>Goodwill is often divided into two types: economic (or business) goodwill and accounting goodwill. However, treating them as entirely separate is misleading. Accounting goodwill is simply the acknowledgment of a company&#8217;s economic goodwill in its financial records.<\/p>\n<p><b>Accounting goodwill<\/b> arises when one company buys another for more than the fair market value of its net assets. This &#8220;creation&#8221; of goodwill is not actually the formation of a new asset, but the formal recognition of an already existing one.<\/p>\n<p>It appears as an intangible asset on the balance sheet, reflecting the value attributed to things like brand reputation, loyal customers, or other competitive advantages.<\/p>\n<p><b>Economic or business goodwill<\/b> refers to these intangible assets, such as a strong brand or excellent customer relationships, that give a company a competitive edge. This value can often be inferred by analyzing metrics like the return on assets ratio.<\/p>\n<p>In Malaysia, a notable <a href=\"https:\/\/www.gurufocus.com\/term\/good-will\/XKLS%3A4081?\" target=\"_blank\" rel=\"noopener\">example of goodwill<\/a> is Pan Malaysia Corporation Berhad, which reported goodwill of RM17.4 million as of September 2024. This goodwill accounting stems from the company&#8217;s strong brand identity and customer loyalty in the consumer goods sector.<\/p>\n<h2><b>Limitations of Goodwill Accounting<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1707\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting.webp\" alt=\"goodwill meaning in accounting\" width=\"1200\" height=\"675\" srcset=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting.webp 1200w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-300x169.webp 300w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-1024x576.webp 1024w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-768x432.webp 768w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-747x420.webp 747w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-150x84.webp 150w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-696x392.webp 696w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-meaning-in-accounting-1068x601.webp 1068w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p>Goodwill accounting can be hard to measure, and negative goodwill happens when a company is bought for less than its fair market value. This often occurs in situations where the target company is unable or unwilling to negotiate a better price.<\/p>\n<p>Negative goodwill is common in distressed sales and is recorded as income on the buyer\u2019s income statement.<\/p>\n<p>However, if a previously successful company goes bankrupt, its goodwill accounting loses all value, as it cannot be sold. In such cases, investors exclude goodwill when calculating the company\u2019s remaining equity.<\/p>\n<h2><b>Goodwill Accounting Impairment<\/b><\/h2>\n<p>Goodwill accounting can decrease when the market value of an asset drops below its original cost, often due to events like:<\/p>\n<ul>\n<li aria-level=\"1\">Declining cash flow<\/li>\n<li aria-level=\"1\">Increased competition<\/li>\n<li aria-level=\"1\">Economic downturns<\/li>\n<\/ul>\n<p>When this happens, the company must write down the asset&#8217;s value on the balance sheet. This happens if the acquired net assets are worth less than their recorded value, or if goodwill was overestimated. The impairment loss is the difference between the current market value and the purchase price of the asset.<\/p>\n<p>This write-down reduces the goodwill amount on the balance sheet and is recorded as a loss on the income statement. It lowers the company&#8217;s net income, which can also affect earnings per share (EPS) and the stock price.<\/p>\n<h3><b>Impairment Tests<\/b><\/h3>\n<p>Companies check for impairment using an impairment test, often through two methods:<\/p>\n<ul>\n<li aria-level=\"1\"><b>Income Approach<\/b>: Future cash flows are estimated and discounted to their present value.<\/li>\n<li aria-level=\"1\"><b>Market Approach<\/b>: The assets and liabilities of similar companies in the same industry are compared.<\/li>\n<\/ul>\n<p>These tests help determine if an asset&#8217;s value has decreased. Here\u2019s the step-by-step for goodwill accounting impairment test:<\/p>\n<ul>\n<li aria-level=\"1\"><b>Determine the Carrying Amount<\/b><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\">Calculate the book value of the asset or cash-generating unit (CGU), including goodwill.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Estimate the Recoverable Amount<\/b><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\">The recoverable amount is the higher of:<\/li>\n<li aria-level=\"1\"><b>Value in Use (VIU):<\/b> Estimated future cash flows from the asset\/CGU, discounted to their present value using a discount rate.Formula:<br \/>\n<img decoding=\"async\" class=\"aligncenter size-full wp-image-1709\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-accounting-impairment.webp\" alt=\"goodwill accounting impairment\" width=\"587\" height=\"115\" srcset=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-accounting-impairment.webp 587w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-accounting-impairment-300x59.webp 300w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/goodwill-accounting-impairment-150x29.webp 150w\" sizes=\"(max-width: 587px) 100vw, 587px\" \/>Where <b>t<\/b> is the time period.<\/li>\n<li aria-level=\"1\">\u00a0<b>Fair Value Less Costs to Sell (FVLCTS):<\/b> The market value of the asset, minus any costs of selling it.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Compare Carrying Amount and Recoverable Amount<\/b><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\">If the <b>Carrying Amount<\/b> &gt; <b>Recoverable Amount<\/b>, impairment exists.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Calculate the Impairment Loss<\/b><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\">Impairment Loss = Carrying Amount \u2013 Recoverable Amount.<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Adjust Financial Statements<\/b><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\">Reduce the asset\u2019s book value on the balance sheet.<\/li>\n<li aria-level=\"1\">Record the impairment loss in the income statement.<\/li>\n<\/ul>\n<h2><b>Steps for Calculating Goodwill Accounting\u00a0<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1706\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation.webp\" alt=\"business valuation\" width=\"1200\" height=\"675\" srcset=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation.webp 1200w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-300x169.webp 300w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-1024x576.webp 1024w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-768x432.webp 768w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-747x420.webp 747w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-150x84.webp 150w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-696x392.webp 696w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/business-valuation-1068x601.webp 1068w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p>Calculating goodwill accurately requires careful steps to ensure fair valuation and proper recording. Each step builds on the previous one to create a clear picture of the goodwill value. Below are the steps to calculate goodwill accounting accurately:<\/p>\n<h3><b>1. Book Value of Assets<\/b><\/h3>\n<p>Start by identifying the book value of all assets listed on the target company\u2019s balance sheet, including current, non-current, fixed, and intangible assets. These figures can be found in the company\u2019s latest financial statements.<\/p>\n<h3><b>2. Fair Value of Assets<\/b><\/h3>\n<p>Determine the fair market value of the assets. This step requires professional judgment, and an accounting firm can analyze and justify the fair value of each asset.<\/p>\n<h3><b>3. Adjustments<\/b><\/h3>\n<p>Calculate the adjustment for each asset by subtracting its book value from its fair value.<\/p>\n<h3><b>4. Excess Purchase Price<\/b><\/h3>\n<p>Find the Excess Purchase Price by subtracting the net book value of the target company&#8217;s assets (assets minus liabilities) from the actual price paid for the acquisition.<\/p>\n<h3><b>5. Calculate Goodwill<\/b><\/h3>\n<p>Finally, subtract the Fair Value Adjustments from the Excess Purchase Price. The remaining amount is the Goodwill, which is recorded on the acquiring company\u2019s balance sheet after the transaction is completed, and will be included in the <a href=\"https:\/\/www.hashmicro.com\/my\/blog\/retained-earnings\/\">retained earnings<\/a>.<\/p>\n<h2><b>Examples of Goodwill Accounting\u00a0<\/b><\/h2>\n<p>Let\u2019s say <b>Company BumiTech Sdn Bhd<\/b> acquires <b>Company JayaMart Sdn Bhd<\/b> for RM1,000,000. The fair value of JayaMart&#8217;s net assets differs from the book value due to the following reasons:<\/p>\n<ul>\n<li aria-level=\"1\"><b>Accounts receivable<\/b> fair value is lower because of uncollectible debts.<\/li>\n<li aria-level=\"1\"><b>Inventory<\/b> fair value is lower due to obsolete stock.<\/li>\n<li aria-level=\"1\"><b>Property, Plant, and Equipment (PPE)<\/b> fair value is higher because depreciation exceeded the decline in fair value.<\/li>\n<\/ul>\n<h3><b>Fair Market Value of Net Assets<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Asset\/Liability<\/b><\/td>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Book Value (RM)<\/b><\/td>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Fair Value (RM)<\/b><\/td>\n<\/tr>\n<tr>\n<td>Accounts Receivable<\/td>\n<td>200,000<\/td>\n<td>180,000<\/td>\n<\/tr>\n<tr>\n<td>Inventory<\/td>\n<td>300,000<\/td>\n<td>250,000<\/td>\n<\/tr>\n<tr>\n<td>Property, Plant, and Equipment<\/td>\n<td>500,000<\/td>\n<td>600,000<\/td>\n<\/tr>\n<tr>\n<td>Liabilities<\/td>\n<td>(400,000)<\/td>\n<td>(400,000)<\/td>\n<\/tr>\n<tr>\n<td><b>Net Assets (Fair Value)<\/b><\/td>\n<td><b>600,000<\/b><\/td>\n<td><b>630,000<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>If BumiTech pays RM1,000,000 for JayaMart, the economic goodwill created is:<\/p>\n<p><b>Goodwill<\/b> <b>= Purchase Price \u2212 Fair Value of Net Assets\u00a0<\/b><\/p>\n<p>= 1,000,000\u2212630,000<\/p>\n<p>= 370,000<\/p>\n<p>Therefore, the journal entry for BumiTech Sdn Bhd would look like this one below:<\/p>\n<table>\n<tbody>\n<tr>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Account<\/b><\/td>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Debit (RM)<\/b><\/td>\n<td style=\"background-color: #990000; color: #ffffff; padding: 5px; text-align: center;\"><b>Credit (RM)<\/b><\/td>\n<\/tr>\n<tr>\n<td>Accounts Receivable<\/td>\n<td>180,000<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Inventory<\/td>\n<td>250,000<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Property, Plant, and Equipment<\/td>\n<td>600,000<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Goodwill<\/td>\n<td>370,000<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Liabilities<\/td>\n<td><\/td>\n<td>400,000<\/td>\n<\/tr>\n<tr>\n<td>Cash<\/td>\n<td><\/td>\n<td>1,000,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><b>Explanation:<\/b><\/p>\n<ul>\n<li aria-level=\"1\"><b>Assets<\/b> (Accounts Receivable, Inventory, and PPE) are recorded at their fair values.<\/li>\n<li aria-level=\"1\"><b>Goodwill<\/b> represents the premium BumiTech paid over the fair value of JayaMart&#8217;s net assets.<\/li>\n<li aria-level=\"1\"><b>Liabilities<\/b> are recorded at their fair value.<\/li>\n<li aria-level=\"1\"><b>Cash<\/b> reflects the purchase price paid by BumiTech.<\/li>\n<\/ul>\n<h2><b>Tackle Goodwill Valuation Challenges Easily with HashMicro<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1711\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses.webp\" alt=\"\" width=\"1470\" height=\"900\" srcset=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses.webp 1470w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-300x184.webp 300w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-1024x627.webp 1024w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-768x470.webp 768w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-686x420.webp 686w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-150x92.webp 150w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-696x426.webp 696w, https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/01\/HashMicro-Accounting-Software-for-Multiple-Businesses-1068x654.webp 1068w\" sizes=\"(max-width: 1470px) 100vw, 1470px\" \/><\/p>\n<p>Goodwill accounting can be tricky, especially when dealing with fair market values, impairment tests, and financial standards like MFRS or IFRS. On top of that, using manual methods or separate tools often leads to disjointed data, which leads to tedious check-and-balance progress.<\/p>\n<p>However, with the technology that can centralize data and is easy to use, such as <a href=\"https:\/\/www.hashmicro.com\/my\/accounting\"><b>HashMicro Accounting Software<\/b><\/a>, reviewing and monitoring goodwill accounting has been simplified. With advanced features and built-in Business Intelligence (BI), shareholders can easily make measured decisions.<\/p>\n<p>HashMicro provides these features for accurate goodwill accounting review:<\/p>\n<ul>\n<li aria-level=\"1\"><b>Complete Financial Statement (GL, TB, P&amp;L, BS) with period comparison: <\/b>Helps in tracking goodwill on the balance sheet and assessing changes over time. With <a href=\"https:\/\/www.hashmicro.com\/my\/blog\/best-financial-reporting-software\/\">financial reporting software<\/a>, these statements are generated seamlessly, ensuring accuracy.<\/li>\n<li aria-level=\"1\"><b>Multi-Level Analytical (Compare FS per project, branch, etc): <\/b>Enables detailed analysis of how goodwill affects financial performance across segments.<\/li>\n<li aria-level=\"1\"><b>Comprehensive financial reporting: <\/b>Provides insights needed for valuation and impairment testing of goodwill.<\/li>\n<li aria-level=\"1\"><b>Equity Movement Report: <\/b>Useful for understanding changes in shareholder equity related to goodwill adjustments.<\/li>\n<li aria-level=\"1\"><b>In-Depth Accounting Reports:\u00a0 <\/b>Supports the calculation of metrics like return on assets, which is key in assessing goodwill\u2019s economic impact.<\/li>\n<li aria-level=\"1\"><b>Comprehensive Treasury and Forecast for Cash Management: <\/b>Helps evaluate whether a company has sufficient resources to justify goodwill during acquisitions.<\/li>\n<li aria-level=\"1\"><b>Asset Management with Revaluation, with 3 Depreciation Methods: <\/b>Assists in aligning the valuation of tangible and intangible assets, including goodwill.<\/li>\n<li aria-level=\"1\"><b>Customer Aging Report &amp; Statement: <\/b>Helps in assessing the quality of receivables, which can indirectly impact goodwill valuation during acquisitions.<\/li>\n<\/ul>\n<h2><b>Conclusion<\/b><\/h2>\n<p>Goodwill accounting captures the extra value a company pays above the fair market value of assets. It includes intangible benefits like a brand reputation for added value. However, goodwill must be carefully monitored, especially with annual impairment tests required under financial standards.<\/p>\n<p>Struggling with the complexities of goodwill accounting? <a href=\"https:\/\/www.hashmicro.com\/my\/accounting\"><b>HashMicro\u2019s Accounting Software<\/b><\/a> makes it simple and hassle-free. With advanced features like real-time reporting and financial analysis, you can handle goodwill calculations effortlessly.<\/p>\n<p>HashMicro\u2019s intuitive platform brings everything together, which makes goodwill accounting a breeze. This <a class=\"cursor-pointer\" href=\"https:\/\/www.hashmicro.com\/my\/blog\/best-erp-software\/\" target=\"_new\" rel=\"noopener\" data-start=\"1111\" data-end=\"1168\">ERP software<\/a> automates goodwill valuation calculations and tracking impairment results directly in real time. As a result, the company is presented with accurate data for easier goodwill accounting valuation.<\/p>\n<p>What are you waiting for? Try the <a href=\"https:\/\/www.hashmicro.com\/my\/free-product-demo\/\">free demo<\/a> now!<\/p>\n<a href=\"https:\/\/www.hashmicro.com\/my\/free-product-demo\/?medium=free-product-demo\" target=\"_blank\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/08\/free-demo-desktop-my.webp\" data-desktop-src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2025\/08\/free-demo-desktop-my.webp\" data-mobile-src=\"https:\/\/www.hashmicro.com\/my\/blog\/wp-content\/uploads\/2024\/07\/free-demo-mobile-my.jpg\" alt=\"FreeDemo\" class=\"responsive-image-banner\"><\/a>\r\n\r\n<script>\r\n    \/\/ check which image to use based on screensize\r\n    document.addEventListener(\"DOMContentLoaded\", function() {\r\n        function updateImageSource() {\r\n            var images = document.querySelectorAll('.responsive-image-banner');\r\n            var screenWidth = window.innerWidth;\r\n\r\n            images.forEach(function(img) {\r\n                var mobileSrc = img.getAttribute('data-mobile-src');\r\n                var desktopSrc = img.getAttribute('data-desktop-src');\r\n\r\n                if (screenWidth < 576 && mobileSrc) {\r\n                    img.setAttribute('src', mobileSrc);\r\n                } else {\r\n                    img.setAttribute('src', desktopSrc);\r\n                }\r\n            });\r\n        }\r\n\r\n        \/\/ Initial check\r\n        updateImageSource();\r\n\r\n        \/\/ Update on resize\r\n        window.addEventListener('resize', updateImageSource);\r\n    });\r\n<\/script>\n<h2><strong>FAQ on Goodwill Accounting<\/strong><\/h2>\n<ul class=\"bottom_faq\">\n<li>\n<details>\n<summary><strong>How is goodwill different from other intangible assets?<\/strong><\/summary>\n<p>Unlike specific intangible assets like patents or trademarks that can be valued and sold separately, goodwill is an overall value tied to the company itself. Goodwill can\u2019t be separated or sold individually and is listed as a single asset on the balance sheet.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>What are the different types of goodwill?<\/strong><\/summary>\n<p>There are two main types of goodwill: purchased goodwill, which arises when a company acquires another and pays more than the fair value of its net assets; and inherent (or generated) goodwill, which develops internally over time through factors like brand reputation and customer loyalty.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>How is goodwill used in investing?<\/strong><\/summary>\n<p>In investing, goodwill is crucial in determining a company\u2019s overall worth. Investors analyze financial statements and conduct due diligence on acquisition targets to assess the value of goodwill. Goodwill can also be used as collateral for loans or as part of a merger or acquisition deal structure. However, it&#8217;s important to note that goodwill values can fluctuate over time and may not always accurately reflect a company\u2019s actual worth.<\/p>\n<\/details>\n<\/li>\n<li>\n<details>\n<summary><strong>Is goodwill considered an expense?<\/strong><\/summary>\n<p>No, goodwill is not considered an expense. It is an intangible asset representing the excess of a company&#8217;s purchase price over the fair value of its net assets. In accounting terms, expenses are costs incurred by a business in generating revenue, whereas goodwill reflects the value of intangible factors acquired during a business combination.<\/p>\n<\/details>\n<\/li>\n<\/ul>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [{\n    \"@type\": \"Question\",\n    \"name\": \"How is goodwill different from other intangible assets?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Unlike specific intangible assets like patents or trademarks that can be valued and sold separately, goodwill is an overall value tied to the company itself. 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Before adopting global standards, companies followed a loose approach, often leaving goodwill values unclear and inconsistent. That all changed with the introduction of FRS 136 \u2013 a detailed and technical framework for the impairment of assets. While Malaysia\u2019s move to [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":1708,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[54],"tags":[133],"class_list":{"0":"post-1705","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-accounting","8":"tag-goodwill"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Goodwill Accounting 101: What It Is, How It Works, and Uses<\/title>\n<meta name=\"description\" content=\"Goodwill accounting records the excess value paid during a business acquisition, representing intangible assets like brand recognition.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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