Capitalism 2 and Capitalism Lab Forum

I'd love to see goodwill and amortization added into this financial DLC. It's odd how you take a huge loss when acquiring other public or private companies if the marketcap exceeds the book value. The "loss" should be written down as goodwill and amortized over a period of time, like how real companies do it.

Detailed cashflow statements (cashflow from operations, investing, and financing) would also be nice to see in the new DLC.

Real companies actually do not amortize goodwill anymore, but I think that would be a good way to implement this in the game.

Yes, you are correct. They currently value their goodwill so that it represents "fair value", but that would be pretty hard to implement in a game. A linear amortization will probably work best.

beamthegreat wrote: ↑Sun Feb 11, 2018 4:25 am I'd love to see goodwill and amortization added into this financial DLC. It's odd how you take a huge loss when acquiring other public or private companies if the marketcap exceeds the book value. The "loss" should be written down as goodwill and amortized over a period of time, like how real companies do it.

This sounds like a good idea but the main concern is that amortization over a period of several years will impact the profit of the company and suppress the stock price for a long period of time as opposite to an one-time write-off where the profit can quickly recover the next year. So we are not sure if most players will prefer it to be done this way.

David wrote: ↑Thu May 24, 2018 9:15 am This sounds like a good idea but the main concern is that amortization over a period of several years will impact the profit of the company and suppress the stock price for a long period of time as opposite to an one-time write-off where the profit can quickly recover the next year. So we are not sure if most players will prefer it to be done this way.

If it's not too hard to implement, maybe add another button after you acquire a company so players can choose to amortize it over 30 years or realize the "loss" immediately?

Long amortizable life idea makes sense. Alternatively, make stock market valuation ignore amortization in earnings. Still useful for the player to evaluate and for calculating metrics for victory.