The Argument by Pacific Dunlop (1994)is That the Accounting Treatment

The argument by Pacific Dunlop (1994) is that the accounting treatment of goodwill,particularly the requirement to amortise it over 20 years,places Australian companies at a competitive disadvantage internationally.Miller (1995) analyses this view and argues that:

A) The research that has shown accounting figures to be used in a mechanistic way suggests that Australian firms will be disadvantaged relative to international competitors in the takeovers market.
B) Sophisticated users will be aware that there are no direct cash-flow effects of the different amortisation treatments for goodwill. The effect of differential taxation treatments (since the ATO does not permit a deduction for the amortisation of goodwill) will, however, have a negative impact on Australian companies.
C) The efficient market hypothesis maintains that the capital market will impound accounting information efficiently into the price of shares. Therefore if Australian companies are required to report lower earnings through goodwill amortisation they will be valued at a lower amount than they would otherwise be by investors in the capital market. This would reduce their ability to bid for other companies in a takeover situation.
D) The amortisation of goodwill can be a very significant cost for companies that have purchased a reasonable number of subsidiaries. Companies that are active in the takeover market in this way will be negatively impacted by the reporting of lower profits as a result of Australia's requirement that they amortise goodwill over a maximum of 20 years, whereas other countries permit a 40 year or unlimited life for goodwill.
E) None of the given answers.