THE ESSENCE OF GOODWILL IN DISCLOSING THE INTANGIBLE VALUE OF BUSINESS IN THE CONTEXT OF DIGITAL TRANSFORMATION

Abstract

The intangible component of business value is increasing, yet remains inadequately disclosed in financial reporting. Current accounting standards have not fully developed the tools and methodologies for its comprehensive recognition, measurement, assessment, and full disclosure in reports. Discussions on the essence of goodwill have long been ongoing, and it's evident that this category extends beyond accounting and financial reporting. Digital transformation enhances the interest of researchers, scholars, and practitioners in the essence of goodwill, emphasizing the necessity to consider it as a means of disclosing the intangible value of business in modern conditions. The methodological basis of the conducted research includes methods of analysis, synthesis, historical conceptual review, comparison, logical generalization, grouping, abstraction, and a systematic approach. Studying the history of the development of the goodwill concept allowed identifying the main stages of its formation as an object of accounting, reporting, and management. An in-depth critical analysis of definitions supplemented economic, legal, and accounting approaches to understanding the essence of goodwill with new ones, such as marketing, branding, value, emotional, quantitative, and systemic. The developed classification allows considering all aspects of goodwill manifestation and the views of various assessment subjects on its essence and role in disclosing the intangible value of the business. It is proposed to define goodwill as the intangible value of a business reflecting its reputation, brand, customer loyalty, intellectual property, innovative and technological capabilities, digital user experience, online presence, and a set of other unique intangible assets, which together contribute to the sustainable growth of the company's market value and create competitive advantages, enabling adaptation to changes in the era of digital transformation. Goodwill is a category that exists not only in consolidated reporting, as it characterizes the intangible components of business value and requires appropriate recognition and management.

Keywords

• goodwill
• brand
• intangible asset
• disclosure
• business combination
• disclosed goodwill