What Determines Goodwill Impairment?

A. Verriest and A. Gaeremynck

Review of Business and Economic Literature, 2009, vol. 54, issue 2, 106-129

Abstract: This study investigates determinants of goodwill impairment decisions and their disclosure quality. Under IAS36 goodwill is subject to an annual impairment test in which the carrying amount of goodwill is not allowed to exceed the recoverable amount. However, valuing this recoverable amount is subject to substantial managerial discretion. Therefore, we predict that ownership concentration, corporate governance quality and firm performance provide incentives for managers to engage in goodwill impairment or not, and thus determine financial reporting quality. We construct a sample of firms that should engage in goodwill impairment. Our results convey that better performing firms and firms with stronger corporate governance mechanisms are more likely to impair. Further, ownership structure and governance have a weak impact on the degree of impairment disclosure.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (17)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sen:rebelj:v:54:i:2:y:2009:p:106-129

Access Statistics for this article

Review of Business and Economic Literature is currently edited by Hans Kluwer

More articles in Review of Business and Economic Literature from Intersentia
Bibliographic data for series maintained by Petra Van den Bempt ( this e-mail address is bad, please contact ).