Glossary entry (derived from question below)
French term or phrase:
fonds commerciaux vs. écart d'acquisition
English translation:
business intangibles / goodwill
Added to glossary by
lenkl
Oct 17, 2005 07:23
18 yrs ago
26 viewers *
French term
France
Les mots clés... de votre succès!
Native in: English (Variant: British)
Works in: French to English
fonds commerciaux vs. écart d'acquisition
French to English
Bus/Financial
Accounting
Both translate as goodwill but appear as distinct items in notes to the company's accounts - how do we make the difference in English?
Proposed translations
(English)
| 4 +1 | business intangibles / goowill |
lenkl
|
| 3 | purchased goodwill / goodwill on acquisition |
Buzzy
|
| 3 -1 | consolidated goodwill & acquisition goodwill |
Nikki Scott-Despaigne
|
Proposed translations
+1
1 hr
lenkl
Specializes in field
French term (edited):
fonds commerciaux vs. �cart d'acquisition
Selected
business intangibles / goowill
Nowadays, goodwill refers almost always to the difference between the price and the value of acquisitions (and it may be positive or negative); a "fonds de commerce" is the intangible element of a business, namely its reputation, know-how, etc. and is more than just the other sense of "goodwill", meaning essentially the customer base.
Valuing Business Intangibles - Tierra Grande (October 2003)
How can a business enterprise appraiser place a dollar value on the entrepeneurial expertise and leadership that created a wildly successful business?
recenter.tamu.edu/tgrande/vol10-4/1639.html - 20k - Cached - Similar pages
Valuing Business Intangibles (1639)
(Gilliland) How can a business enterprise appraiser place a dollar value on the enterpreneurial expertise and leadership that created a wildly successful ...
recenter.tamu.edu/pubs/1639.html - 13k
Both are generally amortized over a certain period of time.
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Note added at 2 hrs 11 mins (2005-10-17 09:34:45 GMT)
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Goodwill, not goowill, nor goo will...
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Note added at 2 hrs 42 mins (2005-10-17 10:06:06 GMT)
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Again, because there seems to be so much confusion about relatively simple financial reporting notions:
écart d'acquisition = goodwill
fonds commerciaux = business intangibles
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Note added at 1 day 1 hr 22 mins (2005-10-18 08:46:27 GMT)
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I'm not sure that this will clarify the issue, but it does cover the topic:
The Financial accounting Standards Board (FASB), with the issuance of SFAS 141and 142, prescribes new accounting treatment for acquired business intangibles. The pooling-of-interest method of acquisition accounting is eliminated by SFAS 141. Essentially it is no longer adequate to simply allocate the excess of the purchase price over the value of tangible assets to ‘goodwill’. These new FASB pronouncements require a much more detailed identification, valuation and allocation of the price paid to discrete categories of intangible assets. More specifically, assets identified as marketing related, customer related, artistic related, contract related, and technology related must be separately recognised. Among the intangibles that fall into these categories are trademarks, trade names, customer lists and relationships, literary rights, musical works and artistic recordings, licensing agreements, leases and operating rights, patents and un-patented technology, software, databases and trade secrets. SFAS 142 modifies the treatment of any remaining goodwill by eliminating ratable amortisation and requiring instead the ongoing evaluation for impairment on at least an annual basis at the reporting unit level. Other identified intangible assets must also be tested for impairment by determining ‘fair value’ and comparing to the recorded carrying value of the asset.
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Note added at 1 day 4 hrs 50 mins (2005-10-18 12:13:41 GMT)
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Let me, if I may, try and explain in layman’s terms what “fonds commerciaux” means and how it differs from “goodwill”. A company has assets (including intangibles such as trademarks, patents, etc) and liabilities, and the difference between those represents its net worth. However, because it has been in business for some time, is well known, has long-standing customers, etc., it is actually valued at more than its net worth. What accounts for that excess value is the company’s “fonds commercial”. Now a buyer comes up and acquires the company for a price well in excess of its “value”, perhaps because the acquiring company sees the potential for synergies, or perhaps because its chief executive is a megalomaniac. The excess of the price paid over the net worth of the purchased company is recognized in the acquiring company’s books as “goodwill” and it in fact includes what I call the original company’s “business intangibles”.
Valuing Business Intangibles - Tierra Grande (October 2003)
How can a business enterprise appraiser place a dollar value on the entrepeneurial expertise and leadership that created a wildly successful business?
recenter.tamu.edu/tgrande/vol10-4/1639.html - 20k - Cached - Similar pages
Valuing Business Intangibles (1639)
(Gilliland) How can a business enterprise appraiser place a dollar value on the enterpreneurial expertise and leadership that created a wildly successful ...
recenter.tamu.edu/pubs/1639.html - 13k
Both are generally amortized over a certain period of time.
--------------------------------------------------
Note added at 2 hrs 11 mins (2005-10-17 09:34:45 GMT)
--------------------------------------------------
Goodwill, not goowill, nor goo will...
--------------------------------------------------
Note added at 2 hrs 42 mins (2005-10-17 10:06:06 GMT)
--------------------------------------------------
Again, because there seems to be so much confusion about relatively simple financial reporting notions:
écart d'acquisition = goodwill
fonds commerciaux = business intangibles
--------------------------------------------------
Note added at 1 day 1 hr 22 mins (2005-10-18 08:46:27 GMT)
--------------------------------------------------
I'm not sure that this will clarify the issue, but it does cover the topic:
The Financial accounting Standards Board (FASB), with the issuance of SFAS 141and 142, prescribes new accounting treatment for acquired business intangibles. The pooling-of-interest method of acquisition accounting is eliminated by SFAS 141. Essentially it is no longer adequate to simply allocate the excess of the purchase price over the value of tangible assets to ‘goodwill’. These new FASB pronouncements require a much more detailed identification, valuation and allocation of the price paid to discrete categories of intangible assets. More specifically, assets identified as marketing related, customer related, artistic related, contract related, and technology related must be separately recognised. Among the intangibles that fall into these categories are trademarks, trade names, customer lists and relationships, literary rights, musical works and artistic recordings, licensing agreements, leases and operating rights, patents and un-patented technology, software, databases and trade secrets. SFAS 142 modifies the treatment of any remaining goodwill by eliminating ratable amortisation and requiring instead the ongoing evaluation for impairment on at least an annual basis at the reporting unit level. Other identified intangible assets must also be tested for impairment by determining ‘fair value’ and comparing to the recorded carrying value of the asset.
--------------------------------------------------
Note added at 1 day 4 hrs 50 mins (2005-10-18 12:13:41 GMT)
--------------------------------------------------
Let me, if I may, try and explain in layman’s terms what “fonds commerciaux” means and how it differs from “goodwill”. A company has assets (including intangibles such as trademarks, patents, etc) and liabilities, and the difference between those represents its net worth. However, because it has been in business for some time, is well known, has long-standing customers, etc., it is actually valued at more than its net worth. What accounts for that excess value is the company’s “fonds commercial”. Now a buyer comes up and acquires the company for a price well in excess of its “value”, perhaps because the acquiring company sees the potential for synergies, or perhaps because its chief executive is a megalomaniac. The excess of the price paid over the net worth of the purchased company is recognized in the acquiring company’s books as “goodwill” and it in fact includes what I call the original company’s “business intangibles”.
4 KudoZ points awarded for this answer.
Comment: "Many thanks for your help and the time you took on this question ! It certainly generated some good debate and helped to clear up my (and no doubt a lot of other people's) doubts about these concepts. Thanks again"
13 hrs
purchased goodwill / goodwill on acquisition
I agree with Lenkl's analysis (and I love the word "goowill" :-)), but wonder whether "business intangibles" might not be too broad a term.
The invaluable (and apparently out of print) Dictionnaire Comptable, Fiscal et Financier) by Cabinet Saxcé says:
"Elements incorporels du fonds de commerce: intangible assets of the business. This expression includes the "fonds commercial" which contains items not otherwise identifiable as patents, licenses, or other intangible property"
(these other items are presumably recorded in the relevant account under French regulations, assuming that's the context concerned).
The other thing I think "fonds commerciaux" doesn't cover, although here I may be mistaken, would be internally-generated intangibles. Hence my suggestion to emphasise the origins of the goodwill in order to draw the distinction.
If my analysis holds up, then "purchased business intangibles / goodwill" might also get round the above problems. It's true that "goodwill" almost always means the "écart d'acquisition" type goodwill.
The invaluable (and apparently out of print) Dictionnaire Comptable, Fiscal et Financier) by Cabinet Saxcé says:
"Elements incorporels du fonds de commerce: intangible assets of the business. This expression includes the "fonds commercial" which contains items not otherwise identifiable as patents, licenses, or other intangible property"
(these other items are presumably recorded in the relevant account under French regulations, assuming that's the context concerned).
The other thing I think "fonds commerciaux" doesn't cover, although here I may be mistaken, would be internally-generated intangibles. Hence my suggestion to emphasise the origins of the goodwill in order to draw the distinction.
If my analysis holds up, then "purchased business intangibles / goodwill" might also get round the above problems. It's true that "goodwill" almost always means the "écart d'acquisition" type goodwill.
Reference:
Peer comment(s):
| neutral |
Nikki Scott-Despaigne
: Ditto comment to Lenkl. We're getting there but I agree that "intangible assets" is not a syn. for "fonds commerciaux". FC are one of many types of intangible assets. When both terms appear together, it is only in consolidated accounts...
11 hrs
|
| neutral |
lenkl
: The problem is that your two terms both mean "écart d'acquisition" . I think Saxcé makes it clear, but "business" is not sufficient and I'd rather speak of the value of business intangibles.
11 hrs
|
|
OK, wasn't sure I agreed at first, but further research shows you're right. Still have to be careful about the content of "fonds commerciaux" but I have nothing better to suggest!
|
-1
1 day 1 hr
Nikki Scott-Despaigne
Native in English
Psychologist, Court-certified legal
Native in: English 
Works in: French to English
Related KudoZ points
:
31
French term (edited):
fonds commerciaux vs. �cart d'acquisition
consolidated goodwill & acquisition goodwill
Reposting to put forward a new suggestion in a clearer format after having had the opportunity to consider Lenkl's and and Buzzy's contributions.
Right, after having spent quite a bit of time surfing the internet, I am coming round to the conclusion that so much of the difficulty arises from the fact that in English, goodwill is used for both but that the position of the item makes the sense clear to an English observer.
Lots of links for both terms on the web.
A - What is the difference in meaning ?
Source : Lexique de l'anglais comptable et financier, Khalifa.
GOODWILL (balance sheet/bilan) = fonds commerical : éléments incorporels ne faisant pas l'objet d'une évaluation séparée au bilan. Attention - ne pas confondre avec "goodwill" = 'survaleur'
GOODWILL (consolidated accounts/comptes consolidés) = survaleur : écart d'acquisition positif (ce qui est plus souvent le cas)
Only comment I would make, would be to split the final definition into two, as the "écart" can be positive or negative, thus "survaleur" or "sous-valeur".
B - Rendering ? New suggestion :
fonds commerciaux : consolidated goodwill
écart d'acquisition : acquisition goodwill
Note : As I see it, this gets round any problem of positive or negative (which could of course be added if necessary to the last term, just as it could in the French original)
--------------------------------------------------
Note added at 1 day 1 hr 24 mins (2005-10-18 08:48:15 GMT)
--------------------------------------------------
1 - http://www.camagazine.com/index.cfm/ci_id/5738/la_id/2.htm
Dans les rares situations où un gouvernement acquiert effectivement une entité publique, le Conseil préconise l'application de la méthode de l'achat pur et simple, à condition que l'«écart d'acquisition» soit porté dans les dépenses ou les charges de l'exercice au cours duquel l'acquisition survient. L'écart d'acquisition (souvent désigné comme un «fonds commercial» ou une «survaleur» en comptabilité du secteur privé) est considéré traditionnellement comme un «reliquat», c'est-à-dire un coût engagé en vue de réaliser des bénéfices futurs qui est la résultante de tous les facteurs ne pouvant être identifiés et évalués un à un. Les entreprises amortissent le fonds commercial de façon systématique en le passant en résultat sur les exercices censés donner lieu à ces bénéfices futurs, afin de permettre un juste rapprochement des produits et des charges.
2 - http://www.presse-francophone.org/apfa/Defi/E/ECARTDAC.htm
ÉCART D'ACQUISITION, n. m.
Domaine: comptabilité.
Définition : différence entre le prix payé par l'acheteur d'une entreprise et la somme de valeurs attribuées à chaque élément du bilan de celle-ci.
Note 1 : cette notion ne se rencontre que dans les comptes consolidés.
Note 2 : lorsque l'écart d'acquisition est positif et équivaut à un supplément de valeur, le terme survaleur est utilisé couramment.
Voir : fonds commercial et survaleur.
Anglais : goodwill.
Source : ancien arrêté du 11 janvier 1990 (J.O. du 31 janvier 1990).
Cette page appartient au site de l'APFA
http://www.presse-francophone.org/apfa/Defi/F/FONDSCOM.htm
FONDS COMMERCIAL, n. m.
Domaine : finances / comptabilité.
Définition : éléments incorporels qui ne font pas l'objet d'une évaluation et d'une comptabilisation séparées au bilan et qui concourent au maintien et au développement du potentiel d'activité de l'entreprise.
Note : le fonds commercial ne doit pas être confondu avec le fonds de commerce.
Voir aussi : survaleur
Anglais : goodwill.
Source : arrêté du 11 janvier 1990 (J.O. du 31 janvier 1990).
Cette page appartient au site de l'APFA
Aussi : http://www.finances.gouv.fr/reglementation/terminologie/term...
--------------------------------------------------
Note added at 1 day 1 hr 25 mins (2005-10-18 08:49:29 GMT)
--------------------------------------------------
Finally deleted my first answer to avoid confusion - I hope ! - not through any sense of shame !
Right, after having spent quite a bit of time surfing the internet, I am coming round to the conclusion that so much of the difficulty arises from the fact that in English, goodwill is used for both but that the position of the item makes the sense clear to an English observer.
Lots of links for both terms on the web.
A - What is the difference in meaning ?
Source : Lexique de l'anglais comptable et financier, Khalifa.
GOODWILL (balance sheet/bilan) = fonds commerical : éléments incorporels ne faisant pas l'objet d'une évaluation séparée au bilan. Attention - ne pas confondre avec "goodwill" = 'survaleur'
GOODWILL (consolidated accounts/comptes consolidés) = survaleur : écart d'acquisition positif (ce qui est plus souvent le cas)
Only comment I would make, would be to split the final definition into two, as the "écart" can be positive or negative, thus "survaleur" or "sous-valeur".
B - Rendering ? New suggestion :
fonds commerciaux : consolidated goodwill
écart d'acquisition : acquisition goodwill
Note : As I see it, this gets round any problem of positive or negative (which could of course be added if necessary to the last term, just as it could in the French original)
--------------------------------------------------
Note added at 1 day 1 hr 24 mins (2005-10-18 08:48:15 GMT)
--------------------------------------------------
1 - http://www.camagazine.com/index.cfm/ci_id/5738/la_id/2.htm
Dans les rares situations où un gouvernement acquiert effectivement une entité publique, le Conseil préconise l'application de la méthode de l'achat pur et simple, à condition que l'«écart d'acquisition» soit porté dans les dépenses ou les charges de l'exercice au cours duquel l'acquisition survient. L'écart d'acquisition (souvent désigné comme un «fonds commercial» ou une «survaleur» en comptabilité du secteur privé) est considéré traditionnellement comme un «reliquat», c'est-à-dire un coût engagé en vue de réaliser des bénéfices futurs qui est la résultante de tous les facteurs ne pouvant être identifiés et évalués un à un. Les entreprises amortissent le fonds commercial de façon systématique en le passant en résultat sur les exercices censés donner lieu à ces bénéfices futurs, afin de permettre un juste rapprochement des produits et des charges.
2 - http://www.presse-francophone.org/apfa/Defi/E/ECARTDAC.htm
ÉCART D'ACQUISITION, n. m.
Domaine: comptabilité.
Définition : différence entre le prix payé par l'acheteur d'une entreprise et la somme de valeurs attribuées à chaque élément du bilan de celle-ci.
Note 1 : cette notion ne se rencontre que dans les comptes consolidés.
Note 2 : lorsque l'écart d'acquisition est positif et équivaut à un supplément de valeur, le terme survaleur est utilisé couramment.
Voir : fonds commercial et survaleur.
Anglais : goodwill.
Source : ancien arrêté du 11 janvier 1990 (J.O. du 31 janvier 1990).
Cette page appartient au site de l'APFA
http://www.presse-francophone.org/apfa/Defi/F/FONDSCOM.htm
FONDS COMMERCIAL, n. m.
Domaine : finances / comptabilité.
Définition : éléments incorporels qui ne font pas l'objet d'une évaluation et d'une comptabilisation séparées au bilan et qui concourent au maintien et au développement du potentiel d'activité de l'entreprise.
Note : le fonds commercial ne doit pas être confondu avec le fonds de commerce.
Voir aussi : survaleur
Anglais : goodwill.
Source : arrêté du 11 janvier 1990 (J.O. du 31 janvier 1990).
Cette page appartient au site de l'APFA
Aussi : http://www.finances.gouv.fr/reglementation/terminologie/term...
--------------------------------------------------
Note added at 1 day 1 hr 25 mins (2005-10-18 08:49:29 GMT)
--------------------------------------------------
Finally deleted my first answer to avoid confusion - I hope ! - not through any sense of shame !
Peer comment(s):
| neutral |
Buzzy
: isn't acquisition goodwill also consolidated if it's in the consolidated accounts? (By the way it's nice to see you back on Kudoz, are you in a slack period ?)
1 hr
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Valid point. No, not slowing down, just avoiding filling in some official paperwork !
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| disagree |
lenkl
: Not the right difference in meaning. Consolidated goodwill is still the excess of cost over book value, when entities are first consolidated. Nothing to do with the definition of f.c. above.
3 hrs
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