Goodwill impairment as a reflection of investment opportunities
We exploit a unique opportunity to examine whether goodwill impairment write-offs reflect firms' investment opportunities during the first years of the US goodwill impairment accounting regime. We find that impairment write-offs are negatively associated with firms' underlying investment opportunities. We also find associations between goodwill impairment write-offs and traditionally applied leverage, firm size and return on assets variables, although the leverage and firm size results are less robust. The results support the International Accounting Standards Board and Financial Accounting Standards Board contention that an impairment test regime can reflect firms' underlying economic attributes, while simultaneously indicating that managers use discretion to reduce contracting costs. Copyright (c) The Authors. Journal compilation (c) 2009 AFAANZ.
Year of publication: |
2009
|
---|---|
Authors: | Godfrey, Jayne M. ; Koh, Ping-Sheng |
Published in: |
Accounting and Finance. - Accounting and Finance Association of Australia and New Zealand - AFAANZ, ISSN 0810-5391. - Vol. 49.2009, 1, p. 117-140
|
Publisher: |
Accounting and Finance Association of Australia and New Zealand - AFAANZ |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Investment opportunity set influence on goodwill amortisation
Bradbury, Michael E., (2003)
-
Goodwill impairment as a reflection of investment opportunities
Godfrey, Jayne M., (2009)
-
Investment opportunity set influence on goodwill amortisation
Bradbury, Michael, (2003)
- More ...