Goodwill Impairment (Volume 70.0)
About this book
In 2001, goodwill amortization in the US was eliminated in favor of an impairment-only approach, which, according to critics, gives managers vast discretion and opportunities for earnings management. Prior research suggests that discretionary asset write-offs are associated with economic factors and managers' financial reporting objectives. Based on a systematic literature review, this study investigates for a comprehensive sample of US firms the determinants of goodwill write-off behavior. Regression analysis shows that write-off behavior is significantly explained by firms' economic properties. Only in large, high-profile firms, incentives appear to be significant determinants. These findings suggest that the impairment-only approach does capture goodwill impairment at least to some extent.
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Information
Table of contents
- Cover
- List of abbreviations
- List of symbols
- List of figures
- List of tables
- 1 Introduction
- 2 The goodwill debate
- 3 Empirical research on discretionary asset write-offs
- 4 Discretionary properties of the impairment-only approach
- 5 Empirical investigation of write-off determinants
- 6 Conclusion
- Appendix
- List of references
- List of accounting pronouncements and legal provisions