Do Economic Performance Indicators Support Firms' Claiming a Goodwill Impairment Loss During a Prosperous Year?

31 Pages Posted: 18 Jan 2019 Last revised: 10 Mar 2019

See all articles by Joseph P. Faello

Joseph P. Faello

Mississippi State University

Ajeet Jain

affiliation not provided to SSRN

Seungjae Shin

Mississippi State University

Date Written: January 16, 2019

Abstract

Gaps exist in the goodwill accounting literature stream regarding the informativeness of goodwill impairment losses. On the one hand, researchers find goodwill impairment losses improve earnings’ predictability of cash flows and stock returns. On the other hand, goodwill impairment losses have been linked to opportunistic management behavior. This study fills a gap in the literature by examining firms’ goodwill impairment losses during 2006, a prosperous year. Results do not overwhelmingly support the informative role of goodwill accounting.

Keywords: goodwill, impairment, earnings management

JEL Classification: M41

Suggested Citation

Faello, Joseph P. and Jain, Ajeet and Shin, Seungjae, Do Economic Performance Indicators Support Firms' Claiming a Goodwill Impairment Loss During a Prosperous Year? (January 16, 2019). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference. Available at SSRN: https://ssrn.com/abstract=3317872 or http://dx.doi.org/10.2139/ssrn.3317872

Joseph P. Faello (Contact Author)

Mississippi State University ( email )

1000 Hwy 19 North
Meridian, MS 39307
United States

Ajeet Jain

affiliation not provided to SSRN

Seungjae Shin

Mississippi State University ( email )

1000 Hwy 19 North
Meridian, MS 39307
United States
6014840156 (Phone)

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