Goodwill Impairment: A Comparative Country Analysis

Swanson, Zane L.; Singer, Robert A.; Downs, Alexis

doi:10.2139/ssrn.1003941

Cited by 6 publications

(4 citation statements)

References 41 publications

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“…The hypothesis that we try to verify is that the goodwill impairment item does not give, in absolute terms, relevant information for investors. In particular, we believe, consistent with other studies, that the differences both in terms of accounting practices, as the difference between de jure harmonization (harmonization rules) and de facto harmonization (harmonization practices), and in terms of country-specific factors such as legal, fiscal, cultural and political values (Ashiq and Lee-Seok 2000, Laghi 2006, Swanson, Singer and downs, 2007, can influence the empirical results both in terms of coefficient values and in terms of significance.…”

Section: Literature Reviewsupporting

confidence: 88%

Assessing the Value Relevance of Goodwill Impairment Considering Country-Specific Factors: Evidence from EU Listed Companies

Laghi¹,

Mattei²,

Marcantonio³

2013

IJEF

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The objective of this paper is to assess the value relevance of goodwill impairment losses with reference to the listed companies operating in the European Union area during the period from 2008 to 2011. We investigate whether the information of goodwill impairment is a relevant factor that influences the investment decisions of market operators, testing the statistical significance and the explanatory power of a multivariate regression model widely known in literature for estimating market stock prices of companies using balance sheet data, including goodwill impairment. To this end, we select two samples of companies: a first group of listed companies operating in United Kingdom from 2008 to 2011 that is similar to the one used in previous researches on the same topic; a second group of firms operating in France, Germany, Italy, Portugal, Spain and United Kingdom that reported a goodwill impairment loss for the same period, to extend the analyses also to other economic contexts. Each sample is split into further subsamples differentiated in terms of country of domicile, reference year, industry sector and level of relative importance of goodwill impairments. We propose some changes to the original model, including a new explanatory variable aimed at considering also country-specific differences. The analyses of subsamples show that goodwill impairment is significant only for two years (2008 and 2009) and for French listed companies across all periods. Therefore, further investigation should help in understanding these differences that could be related to country-specific factors such as cultural, environmental and regulatory aspects.

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Section: Literature Reviewsupporting

confidence: 88%

Assessing the Value Relevance of Goodwill Impairment Considering Country-Specific Factors: Evidence from EU Listed Companies

Laghi¹,

Mattei²,

Marcantonio³

2013

IJEF

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“…Many papers study the determinants of goodwill impairments by US firms following SFAS 142 for financial years after SFAS 142 implementation. Swanson, Singer, and Downs (2013) model the probability of a firm taking an impairment charge. They find that firms with a relatively high proportion of opening goodwill are more likely to take an impairment.…”

Section: The Determinants Of Goodwill Impairments and Their Timelinessmentioning

confidence: 99%

Narrative disclosure quality and the timeliness of goodwill impairments

Iatridis

Pappas

Walker

2022

The British Accounting Review

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“…Most of them are carried out in a single country. Only six of the 35 studies analyse data from samples of firms belonging to different countries: three are on EU firms (Avallone & Quagli, 2015;Detzen & Zülch, 2012;Verriest & Gaeremynck, 2009); one on Australian and New Zealand firms ; one within the scope of the SFAS, on a sample of US and non-US firms (Swanson, et al, 2013); and only one worldwide (Glaum, et al, 2018). Therefore, the identification of country factors is limited.…”

Section: Research Line 4: Determinants Of Goodwill Impairmentmentioning

confidence: 99%

Accounting for goodwill: A literature review

Martínez¹,

Rubio²,

Morales³

2023

10.5267/j.ac

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This paper critically reviews the main empirical research on goodwill accounting with the purpose of informing and contributing to current debates: the application of a systematic amortisation plus an impairment when required (amortisation model) or an annual impairment-only test (impairment model). Using the main databases (ABI inform, ProQuest Central, Emerald, Science Direct, Scopus and Google Scholar), this critical review highlights the difficulty to resolve doubts at this stage. Arguments for and against the amortisation and impairment models are found. Nevertheless, going back to a systematic amortisation does not seem to be the solution but the impairment test model is eliminated. We also note that there is more room for improvement of the impairment model. Thus, we provide some guidelines and recommendations to improve it. Finally, we find that further investigation can be carried out to fill the gaps identified in the literature and we make recommendations for future research projects.

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Goodwill Impairment: A Comparative Country Analysis

Cited by 6 publications

References 41 publications

Assessing the Value Relevance of Goodwill Impairment Considering Country-Specific Factors: Evidence from EU Listed Companies

Assessing the Value Relevance of Goodwill Impairment Considering Country-Specific Factors: Evidence from EU Listed Companies

Narrative disclosure quality and the timeliness of goodwill impairments

Accounting for goodwill: A literature review

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