• Management & Information Systems Review
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• v.32 no.1
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• pp.195-216
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• 2013

This Study investigates evaluation policies for goodwill under the current tax law and suggests improvements as follows. First, even though not appear on the financial statements of acquiree at the date of acquisition, the current corporate tax raw regulates that firms need to estimate purchased goodwill including acquisition amount and additionally recognizable intangible property right with no distinction. According to this rule, purchased goodwill from business combination under the current tax raw has a drawback in overestimating. So, there is need of further improvement on the current related purchased goodwill regime to distinguish additionally recognized intangible property right from purchased goodwill. Second, in the consideration of internally generated goodwill, suggested in the current inheritance and gift tax act as a supplementary evaluation technique, the estimated value of goodwill may contain some bias, since the current regulation uniformly applies to all the companies with no industry characteristics. This may particularly become problematic while computing abnormal earnings, uniformly applying the 10% normal return to all the companies since the normal return is not likely to reflect industry characteristics and thus the computed abnormal earnings may be biased. Therefore, there is need to revise the current regulation relating to the normal return, to convert from the existing 10% rule to the industry average rate of return method.

• Journal of Venture Innovation
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• v.2 no.2
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• pp.127-140
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• 2019

A stock valuation on the tax law is based on the valuation by market price. But, unlike the listed stocks, the unlisted stocks mostly have the unclear market price. Accordingly, it is necessary to calculate the fair value which corresponds to the market price. The purpose of this paper is to examine the appropriateness of the complementary valuation method in the Inheritance Tax and Gift Tax Act and to provide suggestions for improvement. This study is intended to provide the problems and solutions relating to the valuation of unlisted stocks through analysis of foreign legal systems and actual disputes. When the actual profit/loss data are used to calculate the net profit/loss value on the present regulations, it has the different weight on the latest 3 years' net profits and losses uniformly. Therefore, to extend the range of unlisted stocks valuation and to show the independent and high professionalism of appraisal council not the subsidy appraisal agency of the National Tax Service, it is necessary to change the current rule that the commissioner of the National Tax Service unilaterally appoints the private members into the method of public offering.