GOODWILL AND ITS EVALUATION IN RUSSIAN AND INTERNATIONAL PRACTICE

Enterprises possess not only real assets such as buildings, equipment, inventories and raw materials, cash assets but also goodwill, a range of customers and reliable suppliers, trademarks and brands, repute in the market – everything that is difficult to estimate at first glance.

It is not easy to evaluate such assets. However, when selling a business, buying a ready-made company, merging or acquiring, and just for good running the value of the company it is important to know the value of intangible assets of the company.

Mergers and acquisitions take place more and more often in the Russian economy. When Russian organizations start using international financial reporting standards (IFRS), they can encounter a wide application in accounting and analysis of the new for the Russian practice concept of “business reputation” or "goodwill".

Universally accepted definition of the term "goodwill" does not exist; this concept is usually treated as reputation, respect, respectability, fame.

Goodwill is primarily the public opinion about the name, style, trademarks, logos, projects, products or any other objects in possession or under the control of the company, as well as the relationship with clients and customers. A particular master of the beauty salon or high-quality cuisine at a restaurant can serve as the sources of goodwill.

Evaluation of goodwill requires a significant investment of time, effort and money. However, in the M&A transactions and for efficient management it is important to know the real value of intangible assets. Foreign companies experience shows the growth in M&A number in various sectors.