I examine management's investment decision under the traditional amortization rules for intangible assets and that under the new rules such as IAS 36, IAS 38, and SFAS 142 where costs of purchased goodwill are subject to periodic impairment tests. I find that under the amortization rules, the...

This paper analyses the issue of the timing of expenditures in replacing fixed assets within the context of valuing firms using the free cash flow approach. Standard practice amongst both practitioners and academics is to assume a smooth pattern in these expenditures past some future point, and...