u6 01

 

The table below shows the differences in accounting treatments for goodwill in three selected countries.

 

Accounting for goodwill in selected countries:

 

Country	Option to expense immediately	Option to charge to equity	Tax deductible
United States	No	No	No*
Canada	No	No	Yes
Great Britain	No	Yes	No

 

 *Goodwill is tax deductible in the United States under limited circumstances; for the purposes of this question, assume it is not.

 

Given a company that has recognized significant acquisition goodwill, identify the country whose accounting and tax rules for goodwill would likely result in the highest valuation of the company. Justify, explain, and discuss your answer.

 

Additional Question:

 

Every day the United States is losing jobs overseas because companies are looking for lower taxes, cheap labor, and fewer rules and regulations.  If taxes are a major concern to your company which country above would you move your company to?  Why?

 

Response should be in about 500 words.