Goodwill Impairment An Empirical Investigation of Write-Offs under SFAS 142

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...

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Main Author: Sellhorn, Thorsten
Format: eBook
Language:English
Published: Frankfurt a.M. Peter Lang GmbH, Internationaler Verlag der Wissenschaften [2018], ©2004, 2018
Edition:1st, New ed
Series:Bochumer Beiträge zur Unternehmensführung
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Collection: JSTOR Open Access Books - Collection details see MPG.ReNa
Summary: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
Physical Description:1 online resource