(In light of the huge goodwill writedown by RBS am reposting a blog entry entitled 'Goodwill Hurting' ... there is a huge risk of further downside in European equities. -AM)
WSJ: Royal Bank of Scotland Group PLC said Monday that tough market conditions in the fourth quarter and mounting impairment charges could push it to a 2008 full-year loss of as much as £28 billion ($41.29 billion), the U.K.'s biggest ever corporate loss.
Excluding goodwill the full-year loss would be between £7 billion and £8 billion, while its estimated goodwill impairment charge will be in the range £15 billion-£20 billion, the bank said.
Tuesday, November 25, 2008
(That oughta leave a 'mark'. - AM)
November 24, 10:43 pm est
by Nathalie Boschat
PARIS -- As the recession bites and stocks continue to slide, acquisitions made by European companies at the height of the merger boom could become a time bomb, as accounting rules are likely to force some businesses into heavy write-downs on goodwill when they report 2008 earnings.
International Financial Reporting Standards have been used by most countries since 2005, but this year marks the first time they will be implemented against the backdrop of a sharp economic slowdown and a heavy stock-market selloff, accountants and experts say, warning that companies could take a severe hit as a result.
In Europe, the total amount of goodwill for companies included in the Dow Jones Stox 600 index is about 1 trillion euros.
This compares with a total market capitalization of 3.507 trillion euros as of Friday's close.