The value relevance of goodwill impairment

Wei Xu, Asokan Anandarajan, Anthony Curatola

Research output: Contribution to journalArticlepeer-review

17 Scopus citations

Abstract

After a 5. year deliberation, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 142, Goodwill and Other Intangible Assets. The main objective of SFAS 142 is to increase transparency. We find that goodwill impairment charges are negatively viewed by investors, on average, but financial health moderates the relation. Returns for profitable firms are negative, but returns for loss firms are positive. The regulatory implications are that the goodwill impairment charge is conveying value relevant information.

Original languageEnglish (US)
Pages (from-to)145-148
Number of pages4
JournalResearch in Accounting Regulation
Volume23
Issue number2
DOIs
StatePublished - Oct 2011

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Sociology and Political Science

Keywords

  • Goodwill impairment
  • Profitability
  • Restructuring
  • Size
  • Value relevance

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