Jaar
2009
Volume
54
Nummer
2
Pagina
106
Taal
Engels
Rechtscollege
Referentie
A. VERRIEST en A. GAEREMYNCK, “What Determines Goodwill Impairment?”, RBE 2009, nr. 2, 106-128
Samenvatting
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.
