This foreign advantage was especially clear in the advertising business, where tangible assets are trivial and British firms bought up a high fraction of the largest U.S. agencies. Companies with extravagantly valued stock also have a better chance to acquire others by pooling. The immediate result, however, tends to be a reduction in the extravagance of the valuations. There was more sympathy for their position at FASB than they recognized, for the world is full of brand names and consumer habit that may retain impregnable value for many years. But FASB staffers claim that the change resulted from field visits and meetings with participants in the market who persuaded the directors that there were better ways to do the accounting.
Fakery is still to be feared.
FASB hopes that by taking this decision down to the division of the company where the goodwill can be seen directly in action, generating revenue, the auditors can avoid subjective judgments. Academics have suggested that the market will decide whether or not goodwill has been impaired, by driving the price of the stock below the book value of the enterprise when the goodwill has been overvalued.