Analysis Of The Essential Elements Of The Goodwill

The goodwill has always been one of the most popular topics which theoretically and practically draw accountants'attentions.but current- ly the researches on goodwill is mainly concentrated in the definition, recognition and measurement of it. However there is not so much research on the essential elements of goodwill both in domestic and abroad.Furth- ermore, although scholars do list a general series of key elements which influence the goodwill,there is not a method to classify such essential elements,especially there is no analysis model could be used on the goodwill.It is very necessary to use relevant theories to analyze each essential element in the composition of goodwill,analyze their relations with the goodwill, and establish theoretical models which reflect such relations,supplement the basic goodwill theory,and finally instructs the practice improving the development of enterprises by attracting atten- tions from the society and enterprises to the composition of the goodwill.This article is based on domestic and foreign existing literature achievements,combining our country's economic environment reality and enterprise's state,utilizing correlated enterprises management theory (core conpetence theory,human capital theory as well as social capital theory) as evidence of composition of the goodwill.As to most researches focusing on the valuation of the purchased goodwill in acquisition,this article point out that the purchased goodwill from acquisition is not the whole part of the goodwill of the acquired firm, the genuine goodwill is also related to other numerous factors such as supply-demand relation- ships in the trade market.Therefore,the purchased goodwill in acquisition is merely taken to the account as a balance item in accounting process. Because the purchased goodwill not only origins from but is also effected by the self-generated goodwill,and firms could take measures to influence the value of the self-generated goodwill,the essential point in valuing the goodwill is the composition of the self-generated goodwill value. Therefore the key issue in studying the value of goodwill is the composing elements of the self-generated goodwill,this article takes the self- generated goodwill as its object investigating the key elements in the composition of the self-generated goodwill.It's very important for scholars and enterprises to study the key elements of goodwill,however at present it's not easy for most of sch- olars to evident which factor is related to the goodwill according to the positive analysis method .after all,the value of goodwill only has been confirmed in the acquidition and enterprise's self-generated goodwill has not been manifested in the accounting statement.it's difficult to analyze the relationship between goodwill and each composing element for lacking the essential number.So this article basing on the division of the factors of goodwill,explains the composing factors of self-generated goodwill qualitatively,according to the normative analysis method.The author classifies the key elements as to explicit the relationship between every essential factor and goodwill,and then establishs the theoretical analysis model.at the same time,this text also do the case study to positively provide and examine the theory proposed by the normative analysis.This article questions the view that goodwill is immeasurable,and explains goodwill can be divided,which is the foundation of classifying the key elements of the goodwill.Then it indicates the unreasonableness of the existing goodwill elements classification methods through analy- zing.By introducing and combining the advantages of Human capital theory and Core competency theory ,and Social capital theory ,and analyzing their relationships with the goodwill of firms, it sums up the theoretical basis of classifying the essential elements of the goodwill.In this founation, the article proposes the theoretical analysis model of the composing elements of the self-generated goodwill.This model divides these elements into internal factors and exterior factors.Interior integrants include human essential factors and the effect from combining enterprise interior resources; exterior integrants include the enterprise'relations with government and national departments, relations with finance organizati- ons, relations with customers, suppliers, and distributions, relations with media, relations with the public and so on.The article elaborates each element of goodwill and the relationship between them in detail, and the ways they effect on the goodwill and indicates that human factor is the essential one among all the factors composing the self-generated goodwill and its influences on both interior and exterior relations in the firm.At the end of the text,using the analytical model,the anthor does a case study analyzing the principle of each element influenced the goodwill,and puts forwad the suggessions on measurement of goodwill and how to raise value of goodwill.The innovation of this study is two point:first,this article proposes the theory of dividing the composing elements of goodwill,at the base of analyzing the enlightenment on the dividing of goodwill from the core competency theory ,human capital theory and social capital theory.second, The author originally puts forward the theoretical analysis model of the composing elements of the self-generated goodwill and does a case study,and proposes the suggessions on measurement of goodwill by the compositeindex analysis method.