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The value relevance of goodwill impairment
Journal article   Peer reviewed

The value relevance of goodwill impairment

Wei Xu, Asokan Anandarajan and Anthony Curatola
Research in accounting regulation, v 23(2)
2011

Abstract

Goodwill impairment Profitability Restructuring Size Value relevance
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.

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27 citations in Scopus

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