liikearvot

Liikearvot is the plural form of liikearvo, a Finnish accounting term referring to goodwill that arises in a business combination. Goodwill represents the excess of the purchase price paid for an entity over the fair value of identifiable net assets acquired. It captures factors such as expected synergies, brand strength, customer relationships, and workforce quality that are not separately identifiable assets.

Recognition and measurement: Liikearvo is recognized as an asset on the acquirer’s balance sheet at the acquisition date. Its value is determined as the fair value of the consideration transferred, plus any non-controlling interests and other components required by the applicable accounting framework, minus the fair value of net identifiable assets acquired. Transaction costs related to the acquisition are typically expensed separately.

Impairment and amortization: Under most modern accounting frameworks, liikearvo is not amortized. Instead, it is subject to impairment testing at least annually and whenever there are indications of impairment. The impairment test is performed at the level of cash-generating units or groups of units. If the carrying amount exceeds the recoverable amount, an impairment loss is recognized in profit or loss. In many frameworks, impairment losses on goodwill cannot be reversed.

Presentation and disclosure: Liikearvo is presented on the balance sheet within intangible assets, often disclosed separately from other intangibles. Disclosures typically cover the methodology of impairment testing, key assumptions used in the calculation, and sensitivity analysis.

Context and scope: The concept is central to financial reporting for acquisitions and the valuation of acquired entities. It is used under international standards such as IFRS and the corresponding national implementations, including Finnish accounting practice.