Almost 100 companies, investors and accountancy firms replied to the ASB's discussion paper on goodwill, including BAT Industries, Standard Life and Imperial Chemical Industries. They were almost evenly split in support of the three options outlined in the draft, mirroring the views of the board members themselves, who failed to reach agreement on the ideal treatment.
The document is part of the ASB's effort to clean up the area of acquisition accounting. It arises when companies pay more for their purchase than the assets of the business acquired are worth - goodwill is in effect the balancing number between these two figures.
The problem is exacerbated by the fact that most companies establish provisions for redundancies and rationalisation when they make acquisitions, which reduce the value of net assets and inflate the amount of goodwill.
Under current accounting rules, goodwill has to be written off against reserves as soon as the acquisition is completed. The discussion draft proposed three alternatives: retaining the current treatment, depreciating it against profits over a number of years, or leaving it on the balance sheet as an asset but reviewing its value, defined by a strict formula, annually.
Michael Butcher, secretary of the ASB, said public meetings were being considered as a way of reaching a consensus, but no final decision had yet been taken on whether, or how, they would be held. Public meetings are common in the US, where most of the standard setters' procedures are open to the public, but in Britain such a move would be unprecedented.
Although respondents were split on how goodwill should be treated, most were in favour of keeping intangible assets as a separate category in the balance sheet rather than, as the ASB suggested, treating them as part of goodwill.
That could have had a dramatic impact on the accounts of companies such as Cadbury Schweppes, Reckitt & Colman and Grand Metropolitan, which include the value of brands they have bought on the balance sheet. Cadbury, for example, values its acquired brands at pounds 545.8m, compared with net assets of pounds 1.5bn. If these had to be excluded from the balance sheet, its gearing - debt as a proportion of net assets - would rise from 32 to 50 per cent.