write-off goodwill immediately against shareholders' equity rather than against net income. 12/
The lASe has indicated that it intends to require goodwill to be
recognized as an asset and written-off against income over a period of
standard would be tougher than the existing U.S. standard with respect
to the amortization period, but it also would prohibit the practice of
writing off goodwill directly against shareholders' equity. Regardless of
what one thinks of the arguments for either type of accounting
treatment, there are substantial benefits simply to settling on one
standard that applies to all companies and thereby leveling out at least
one bump on the business playing field.
OBSTACLES TO ACHIEVING HARMONIZATION
If the benefits of international accounting harmonization are clear,
why has it been more talked about than realized? Why has deed lagged
so far behind hope?
One factor often cited in the past as an obstacle to achieving
harmonization is the differing purposes for which accounting principles
have been developed in different countries. Since those purposes differ,
12/ .s.uhL at 594. 13/ lASe, supra note 7, at 17.