This study investigates the informativeness of purchase price allocations (PPAs) that involve fair value estimation of acquired assets and liabilities after a business combination. Using a model capturing the amount of goodwill expected after the initial announcement of an acquisition, we...

Accounting standards, and financial statements disclosed in accordance with these standards, aim to reduce information asymmetry between insiders and outsiders. So, in a context of external growth, Purchase Price Allocations’ works (PPA) may contribute to improve usefulness of financial...

Standards setters support that purchase price allocations (PPAs) enhance financial statement decision-usefulness whereas academics and practitioners challenge this statement. We test the consequences of the quality of PPAs, subsequent to business combinations, on change in market expectations....

The cost of equity capital is traditionally considered as an increasing function of the estimation risk – the risk of error regarding the distribution of a firm’s future cash flows (FCF). Under international GAAPs, IAS 36 “Impairment of assets” -based information disclosure conveys...

L'ouvrage présente et discute les méthodes d'évaluation pertinentes dans le cadre préparatoire au reporting financier en normes IFRS.

This article focuses on the determinants of goodwill impairment. After reviewing International and US standards related to accounting for goodwill, we identify two types of risk factors that can lead to goodwill impairments: economic factors (e.g., initial overpayment, or a deterioration of the...

Information risk – the uncertainty regarding the parameters of the distribution of firms’ future cash flows – generates valuation errors and is costly to investors who require a higher return to compensate for greater information risk. We argue that, on average, through their...

This study investigates the informativeness of purchase price allocations (PPAs) that involve fair value estimation of acquired assets and liabilities after a business combination. Using a model capturing the amount of goodwill expected after the initial announcement of an acquisition, we...