Application Of Analytic Hierarchy Process In Goodwill Access

With the upgrading of economic restructuring, more and more mergers andacquisitions between enterprises have been happened. So the assessment of goodwillhas become more important in the business deals. Goodwill assessment plays animportant role. It can increase corporate image. In order to enhance the corporateimage, enterprises try their best to increase the value of goodwill. Goodwill is animportant part of intangible assets. It can bring excess profits for enterprises.Goodwill assessment as an evaluation of intangible assets, which is started late andslow,starts much later than other assets evaluation. The current domestic andinternational research on goodwill value is still not perfect, which need expertsfurther analysis. To study the value of the goodwill can not only increase theenterprise overall value in M&a process, but also to understand their operatingconditions in order to help enterprises, and improve enterprise management level.Therefore, the goodwill evaluation is particularly important in the enterprise merger.The value of goodwill can reflect the direction of future development ofenterprises, which includes the level of technology, social influence, humanresources, external environment and many other factors. But for the current domesticand foreign on goodwill evaluation theory is not mature, rare the goodwill real caseand the evaluation process accompanied by some false assessments, it is verynecessary for a deeper analysis of goodwill evaluation. The value of the traditionalevaluation method of goodwill is the income method. Income approach calculatesthe future excess profits by carrying on the forecast, and give a discount to the valueappraisal time as the assessment results. The value of goodwill is mainly decided bythe excess earnings. It is goodwill which can bring enterprise excess return. Theincome method includes the cumulative abnormal return method and the cuttingmethod of difference. By comparing the two methods, they all ignore the comparingbetween social and the same industry. In addition to the total assets of the enterprise synergism of reason, it makes a high value of the overall enterprise. Then theevaluation results will be inaccurate.Firstly, in this paper by learning the domestic and foreign experts on theassessment of the value of the goodwill, the author summarizes the relevant theoriesabout the value of the goodwill. Secondly, it focuses on the shortcomings betweenthe application of the method of excess earnings and cut difference method in theassessment of the value of the goodwill. Thirdly, in order to avoid the shortcomingsbetween the traditional evaluation method based on the value of goodwill, This paperintroduces the income approach to the traditional analytic hierarchy processimprovement. It introduces the application of AHP in the assessment of the value ofthe goodwill. And then with the value of goodwill evaluation as an example of afood company, for goodwill value analysis to the appraisal object, and then verify therationality of the method.