Purpose – This paper outlines the link between value creation, performance measurement andgoodwill accounting according to IFRS and US-GAAP. Since economic goodwill is identical to thepresent value of future residual income, we examine the question of how accounting informationgathered for...

We analyze the trade-off between the benefits of signaling and the distortions fromopportunistic earnings management resulting from the discretionary capitalization ofResearch & Development (R&D) expenditures. The latter can be used by managers to signalprivate information to the market. It can...

The discussion on value-based performance measures is centered around the concept of residualincome. The main property of residual income is its connection to capital budgeting and the net-present-value-rule. This property is, however, not sufficient to guarantee strong goal congruencebetween...

The objective of this paper is threefold. First we develop a comprehensive framework for value-relevant disclosures (Value Reporting) to serve as the theoretical background for BusinessReporting in order to give guidance for preparers and standard setters in their task to structure...

Numerous empirical studies provide evidence on the value relevance of capitalizing expenditures on intangibles such as research & development (Lev and Sougiannis 1996, Hand 2003). However, accounting standards in many countries, such as the U.S. or Germany, prohibit capitalizing these. In this...