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Overpaid acquisitions and goodwill impairment losses — Evidence from the US

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  • Olante, Maria Elena

Abstract

The purpose of this study is to shed light on the reliability of accounting goodwill numbers by examining whether many goodwill impairment losses arise from overpayment for the target at the time of the acquisition, rather than from a subsequent deterioration of goodwill values. A second related objective is to assess whether the goodwill impairment test introduced by SFAS 142 improved the ability of accounting standards to timely capture situations in which the amount of goodwill is overstated and should thus be written down.

Suggested Citation

  • Olante, Maria Elena, 2013. "Overpaid acquisitions and goodwill impairment losses — Evidence from the US," Advances in accounting, Elsevier, vol. 29(2), pages 243-254.
    • Handle: RePEc:eee:advacc:v:29:y:2013:i:2:p:243-254
    DOI: 10.1016/j.adiac.2013.09.010
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    Cited by:

    1. Sun, Li, 2016. "Managerial ability and goodwill impairment," Advances in accounting, Elsevier, vol. 32(C), pages 42-51.
    2. Roncagliolo, Elisa & Avallone, Francesco, 2022. "Recognition of provisional goodwill: Real need or communication strategy?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).

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    More about this item

    Keywords

    Goodwill; Impairment; Merger and acquisitions; SFAS 141; SFAS 142; Reliability;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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