Logo image
Back
International acquisition accounting method and corporate multinationalism: Evidence from foreign acquisitions
Journal article   Peer reviewed

International acquisition accounting method and corporate multinationalism: Evidence from foreign acquisitions

Kathleen Dunne and Gordian Ndubizu
Journal of international business studies, v 26(2), pp 361-377
01 Apr 1995
DOI: https://doi.org/10.1057/palgrave.jibs.8490178

Abstract

Accounting Accounting policies Accounting theory Acquisitions & mergers Bids Competition Equity Foreign investment Goodwill Hypotheses International accounting standards Mathematical models Net income R&D Research & development Return on investment Shareholders equity Stockholders Studies Taxation
The effect of different international accounting and tax treatments for goodwill on target shareholders' wealth is examined. The evidence shows that foreign companies that write off goodwill against a reserve account transfer more wealth to the target shareholders than those that amortize goodwill against income. Further analysis reveals that foreign acquirers that deduct goodwill for tax purposes transfer more wealth to the target stockholders at the acquisition announcement than other acquirers. Such wealth transfers are precipitated by the competition for corporate control. Thus, the more advantageous international accounting and tax treatments for goodwill may leave US bidders at a disadvantage as they compete with foreign acquirers for corporate control.

Metrics

12 Record Views
13 citations in Web of Science
15 citations in Scopus

Details

InCites Highlights

Data related to this publication, from InCites Benchmarking & Analytics tool:

Collaboration types
Domestic collaboration
Web of Science research areas
Business
Management
Logo image