The entanglement of accounting goodwill: Einstein’s “spooky action at a distance”

ABSTRACT

The idea of applying quantum physics concepts or methods to economic and/or social phenomena is not new. Quantum mechanics is increasingly entering the social world as a means of helping to explain social phenomena. This article extends this approach to the accounting field, to explore the economic nature of goodwill. After reviewing Barad’s concept of agential realism, we develop a quantum interpretation and present a new conceptual approach to accounting goodwill. In this theory-building exercise we discuss quantum concepts such as entanglement, diffraction and intra-action to propose a physical and economic inseparability between goodwill and other company assets. We maintain that intangible capital (goodwill) and physical capital are “entangled”, and this entanglement forms the company’s economic value. Unlike Einstein, we conclude that the entanglement of physical capital and intangible capital through intra-action is not “spooky action at a distance” but a form of wealth creation (or wealth destruction) in companies.

KEYWORDS:

• Goodwill
• agential realism
• quantum entanglement
• quantum social science

Acknowledgements

We gratefully acknowledge the helpful comments and suggestions from two anonymous reviewers and the editor, Professor Carol Tilt. We also thank Professors João Bilhim (University of Brasília), Andrea Gonçalves (University of Brasília), Roberto Carlos Klann (University of Blumenau), Maria Elisabeth Moreira Carvalho Andrade (Federal University of Uberlândia), Sirlei Lemes (Federal University of Uberlândia), Vagner Antonio Marques (Federal University of Espírito Santo), Jorge Katsumi Niyama (University of Brasília), Carla Carvalho (University of Aveiro) and participants at the XV ANPCont annual congress for their contributions to the improvement of this study.

Disclosure statement

No potential conflict of interest was reported by the author(s).