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Goodwill Impairment Test Disclosures under Uncertainty

Author

Listed:
  • Karol Marek Klimczak

    (Kozminski University, Poland)

  • Marta Dynel

    (Institute of English Studies, University of Lodz, Poland)

  • Anna Pikos

    (Institute of English Studies, University of Lodz, Poland)

Abstract

The goal of this paper is to examine how disclosures of goodwill impairment tests under IAS 36 are prepared in conditions of high uncertainty. The data come from Polish companies listed at the Warsaw Stock Exchange, where economic and legal developments have been dynamic as compared to the main global equity markets, thus increasing uncertainty. We use interviews and content analysis, and we draw on genre theory to understand how narrative disclosures are written. We find that the disclosures follow clear rules of a genre, which require the financial statement disclosures to be a domain of facts. In cases where significant doubts concerning the reliability of impairment test outcomes exist, preparers place clues that professional readers can notice and follow to determine the reliability of test results themselves. These findings suggest that specific disclosure requirements are needed in countries where the national culture does not favor open discussions of the limitations to the reliability of accounting numbers.

Suggested Citation

  • Karol Marek Klimczak & Marta Dynel & Anna Pikos, 2016. "Goodwill Impairment Test Disclosures under Uncertainty," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(4), pages 639-660, December.
    • Handle: RePEc:ami:journl:v:15:y:2016:i:4:p:639-660
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    References listed on IDEAS

    as
    1. Alicja Jaruga, 1993. "Changing rules of accounting in Poland," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 115-126.
    2. Christensen, Hans B. & Hail, Luzi & Leuz, Christian, 2013. "Mandatory IFRS reporting and changes in enforcement," Journal of Accounting and Economics, Elsevier, vol. 56(2), pages 147-177.
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    Cited by:

    1. Atanasov, Atanas, 2019. "Репутацията Като Обект На Счетоводството: Признаване, Оценяване, Оповестяване [Goodwill as an accounting object: initial recognition, measurement, disclosure]," MPRA Paper 97938, University Library of Munich, Germany.
    2. Sandell Niklas, 2022. "The Rhetorical Handling and Construction of Uncertainty in Tax Litigation Concerning Valuation of Financial Instruments," Nordic Tax Journal, Sciendo, vol. 2022(1), pages 27-44, December.

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    More about this item

    Keywords

    disclosure; narrative; content analysis; interview;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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