| Subject: | [socialcredit] Re: "Goodwill" ~ question for Bill Ryan | | Date: | Monday, November 12, 2007 13:49:00 (-0800) | | From: | william_b_ryan <william_b_ryan @.....com>
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When you say 'inherent' goodwill would not be shown as
an 'Asset' on a corporate balance sheet, then a
possibly appreciating 'intangible' value, like, say,
"brand name recognition", ("Pepsi-Cola", for
instance), would not be shown as having any 'value'
whatsoever?
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That's right. Accounting is based on actual
transactions and historical costs. Changes in values,
inasmuch as they do not derive from actual
transactions by the firm, are generally not recorded.
An exception would be the recording of "impairment" to
previously booked goodwill occurring during an
accounting period, under the new rules, if the market
value of the goodwill has declined. The hypothetical
appreciation in the value of goodwill, inasmuch as it
has not occurred through a transaction, would not be
recorded.
-
Any 'value' in that could only be materialized as an
'Asset' in the books of some other company that had
paid an excess over the 'book value' for say, taking
over the "Pepsi-Cola Company"?
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The trade-mark could of course be sold or licensed
without selling the firm, in which case the license to
use the trade-mark becomes an asset to the licensee,
which is expensed during the term of the license.
-
If this is so, then there would be some difference
between the way a 'balance sheet' is set up
'corporately', and the way a 'National Balance Sheet'
would be set up, would there not?
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Yes, but not only for that reason. The National
Balance Sheet is only analogous to a corporate balance
sheet. It is not the same thing as a corporate
balance sheet. The nation is not a profit-making
firm. The accounting is based on different premises
and for different purposes.
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