National Institutions, Transparency and Accounting for Goodwill: Impairment Recognition under IFRS in Europe

Keishi Fujiyama and Sidney J. Gray
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Keishi Fujiyama: Research Institute for Economics and Business Administration, Kobe University, JAPAN
Sidney J. Gray: University of Sydney Business School, AUSTRALIA

No DP2026-05, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We investigate how national institutions impacting accounting transparency norms may influence accounting practices, with particular reference to the use of management discretion, in the context of a global accounting standards setting regime. Specifically, we examine whether national institutions impacting on accounting transparency have a persistent influence on goodwill impairment recognition decisions in Europe following the implementation of International Financial Reporting Standards (IFRS). Using a sample of 870 firm-year observations from 13 European countries during 2007 to 2014, including the global financial crisis period, we find that firms in countries with strong equity financing, a common law tradition and higher culturally derived transparency values are more likely to recognize goodwill impairment losses. We also find some evidence that national institutions impacting accounting transparency norms persistently influence goodwill impairment practices under IFRS during the global financial crisis period similar to non-crisis periods.

Keywords: Accounting transparency; National institution; Accounting for goodwill; Goodwill impairment; IFRS (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-02
New Economics Papers: this item is included in nep-acc
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