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VALUATION OF GOODWILL INTERNALLY GENERATED THROUGH MARKET VALUE: A STUDY ON THE BASIS OF FINANCIAL STATEMENTS OF A TECHNOLOGY COMPANY
Authors: Carlos Augusto Pacheco Pereira, Eliene Aparecida de Moraes, Jonatas Dutra Sallaberry
Number of views: 412
The financial statements often do not reflect the market value of firms, and the difference
between the book value and market value is largely justified by the existence of unrecognized
intangible assets. In the accounting literature there are several methods for valuation of
internally generated intangible assets, such as Lawrence R. Dicksee, Hatfield, New York,
Current Value of Superprofits, Replacement Cost or Current Cost, Economic Value, Value
Realization, Excess Value on Economic Value Chain Model and Residual Valuation of
Intangible Assets, each with advantages and disadvantages in their use. Through a literature
review, this study identified among the methods of measurement of internally generated
goodwill, which is effectively (or near) the value that the market is willing to pay for the
assets of the entity, whereas this difference arises from expectations higher earnings based on
equity and surplus to aggregate entity. In the research we used data obtained from the
financial statements for the years 2009, 2010 and 2011 for a technology company. From the
values obtained for the operationalization of the methods, it was concluded that the method
that most closely approximates the market value is the method Hatfield, where the market
value is approximately six times the book value of the company.