Re: Accounting for the nonzero asset corporation. The MPEx standard.

Quote from: nubbins on July 03, 2013, 11:30:11 PM

Quote from: Peter Lambert on July 03, 2013, 10:39:24 PM

Quote

While a business can invest to increase its reputation, by advertising or assuring that its products are of high quality, such expenses cannot be booked as contributing to goodwill. There is hence a disconnect: goodwill from acquisitions can be booked, since it is derived from a market or purchase valuation, but similar internal spending cannot be booked, although it will be recognized by investors who compare a company's market value with its book value.

I think this implies booking an expenditure such as this as goodwill is wrong, but I could be reading this incorrectly?

Emphasis mine; what counts as an acquisition? They've got BTC1.337 worth of artwork, acquired from a contest winner.

Your reading of "acquisition" is not correct. The type of goodwill that the article is referring to is when one company acquires another, the difference between the purchase price and the Book value + FMV adjustments is treated as goodwill on the B/S of the acquirer. Goodwill is basically the extent to which the acquirer "overpays" for the identifiable assets of the business. "Acquisition" in this context does not refer to merely the purchasing of any asset.

There is a little more complexity here such as negative goodwill and when there is a non-controlling interest, but you get the gist of it.