Accounting for Eternal Goodwill

This post is Not what you think it is.

It is not about that thingy in the balance sheet that IFRS (International Financial Reporting Std) 3 defines as the 'future economic benefits arising from assets that are not capable of being individually identified and separately recognised'.

It is not about the age old battle in the accounting circles that Goodwill in a company "Exists forever" vs. "Doesn't last forever (thus ought to be amortised)".

If you are looking for articles on such matters, look elsewhere ... like the IASB website or something (as for general non-accounting readers looking for a "Goodwill made EZ" explanation, drop me a post in the feedback & I'll try to respond there.

But since, you've dropped by ... and if have some time to kill ... why not read on :

In a general sense, most ppl view goodwill as someone's innate reputation. A good reputation that inclines others to want to associate themselves with that someone.

But how does one gain such a favoured position? Are some people born with it? Can one gain goodwill? Can it lasts forever? Heheh ... there are some parallels with the accounting discussions after all.

Impliedly, goodwill is not something that someone can buy or give to themselves. It is something that others perceive an individual to have.

In other words, it is because others say / perceive I have goodwill, therefore I have. This is indeed a curious state. For example, people want to hang out with say, Mother Teresa because she has goodwill. But that goodwill is accredited to her by the same people that says she has it.

At this juncture some may argue that Mother Teresa did many good works, therefore she has gained the goodwill. So you may say, 'Good works' = 'Goodwill'. But are good works the same as goodwill?

"Semantics! Purely semantics!" you will say. But may I ask you, have you not experienced (or at least heard of situations) whereby you did a good thing for your hubby / wifey / friend /partner (pick one), only to be scowled at unappreciatively!?

"Why the nerve of that ... that ... so this is the thanks I get for being nice!" you wave your fists in the air.

So 'Good works' ≠ 'Goodwill'. And btw, who decided that your works were GOOD? By who's definition that Mother Teresa's works were good? Thus, it must have been that people that says Mother Teresa has goodwill, also decided that the works she did were indeed 'good'.

Herein lies the key. I suggest to you that "goodwill is a position credited (accounting pun intended) to an individual, by others for some characteristic displayed or work performed by the individual, deemed to be 'good' by the others."

This follows then that, it is NOT so much whether I HAVE (or have not) goodwill, but HAVE I (or have I not) displayed good character or good works, as perceived by others.

"Well then, this is pretty tricky. How would I know if OTHERS perceive that I have done what is GOOD or they THINK my character is GOOD? I can't be living my whole life thinking about how others think of me? Surely we can't please everyone!", you protest.

This leads us right back to the question : Who DEFINES what is GOOD?

Some say that there is no universally agreed GOOD, it's all RELATIVE. Thus, these ppl say that there is no such thing as an ABSOLUTE GOOD.

The interesting bit with that idea is that, if it is relative, then what is it RELATIVE TO? Surely there is some benchmark / yardstick / defined absolute point to which something is relative to. If there is no absolute point to begin with or to compare with, then everything (all works / character in this case) would be meaningless / pointless, since nothing ('goodness', in this case) can be measured reliably (accounting pun, again intended).

Therefore, there MUST exist an absolute good. It is against this absolute benchmark that all works / characteristics are decided to be good or not. This benchmark ought to be eternal and above all human benchmarks, if it is to be 'absolutely good'.

Who sets this absolute benchmark? ; and

What if this absolute benchmark is set so high (above all human standards), that it is unattainable?

THESE are the questions that all must answer in order to Account for Eternal Goodwill.

To the 2nd question, the answer is obvious. If the absolute benchmark is set beyond all human standards, then NONE shall attain 'goodness' by way of their own character or works.

None shall have any 'Goodwill' in the sight of the ONE who sets the Absolute Benchmark, unless it is deemed by the MAKER of the benchmark that Goodwill be CREDITED on account of the MAKER's own pleasure / prerogative / doing / decision. For as I mentioned before, goodwill is not earned, but is bestowed upon.

To the 1st question, may I suggest that only THE ONE who is Eternally and Absolutely GOOD can set the 'absolute good' benchmark.

It is to this MAKER that all must account for their Eternal Goodwill.

Atypical Accountant.

In the Beginning ...

In the beginning ... was the Word ... err ... I mean, my 1st thought about setting up a blog was due to all these ramblings in my head that needed an outlet.

I observed that there were blogs about almost everything ... so why not a blog about the ramblings or confessions from an Atypical Accountant (note : NOT A Typical Accountant).

Ah! Accountants! You say ... those boring, bean counters in the backrooms. Those number crunchers that spew digits as they fidgit their fingers with glee seeing you sweat coz' you didn't fill in the claim forms in triplicate.

Well, here ... I shall make my 1st confession ... I spew words more than NUMBERS (and there are no forms to fill up here, 'cept for a feedback space)!

Here in this little space, I hope to talk about accounting in a different light ... in a light manner (I know how many ppl don't like this subject and as 1 acquaintance once said, "Why can't you guys write a simple book to explain all these debits and credits?")

Of course, you are free to ask any question / problem in relation to accounting ... but more than all these, this little blog would poke fun at life ... from the viewpoint of an Aytpical Accountant.

Hope that you will enjoy your stay here ... even if just for a little while ... as a form of displacement activity, if you wish.

AA.

PS. Let's hope this blog lives up to the innumerable bit ... otherwise ...