Goodwill/Intangibles Rules, Earnings Management and Competition
Michael C. I. Nwogugu
affiliation not provided to SSRN
This article analyzes several problems and psychological issues pertaining to the enforcement and efficiency of the US Goodwill and Intangibles accounting regulations (SFAS #141R, Business Combinations, and SFAS #142, Accounting for Goodwill and Intangible Assets). These regulations are likely to increase the incidence of fraud and misconduct. This article introduces a new Goodwill/intangibles disclosure/accounting model that can reduce the incidence of fraud, information asymmetry, moral hazard, adverse selection and inaccuracy; and also introduces new economic psychological theories that can explain fraud, misconduct and non-compliance arising from the implementation of SFAS 141R/142. The issues analyzed and theories developed in this article are applicable to International Accounting Standards Board’s (IASB) IFRS-3R (Business Combinations (Goodwill accounting) and IAS 38 Intangible Assets (accounting for Intangible Assets).
Number of Pages in PDF File: 65
Keywords: Evidence and legal process, fraud, Mergers & Acquisitions, disclosure, economic psychology, goodwill, complexity, intangiblesworking papers series
Date posted: December 12, 2007 ; Last revised: April 18, 2012
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