Determinants of Tangible Long-Lived Asset Impairments under US GAAP and IFRS

48 Pages Posted: 30 Apr 2019

See all articles by Elizabeth A. Gordon

Elizabeth A. Gordon

Temple University - Department of Accounting

Hsiao-Tang Hsu

Texas A&M University - Corpus Christi

Date Written: April 15, 2019

Abstract

This paper explores determinants of tangible long-lived asset impairments under US GAAP and IFRS. Using a sample covering 26 countries, we document that US GAAP impairments are more related to macroeconomic factors consistent with the built-in delay in reporting impairments under two-step impairment testing and measuring the impairment loss at fair value. IFRS impairments are more associated with firm-specific factors consistent with measuring the impairment at value-in-use and a one-step impairment test. Results also indicate US GAAP impairments are more associated with reporting incentives, except for having private debt. Further, when enforcement is low, impairments are less (more) associated with economic factors (reporting incentives) for IFRS reporters.

Keywords: IFRS, US GAAP, Impairment, Write-off, Enforcement

JEL Classification: D78, F02, M16, M41, G38

Suggested Citation

Gordon, Elizabeth A. and Hsu, Hsiao-Tang, Determinants of Tangible Long-Lived Asset Impairments under US GAAP and IFRS (April 15, 2019). Available at SSRN: https://ssrn.com/abstract=3372609 or http://dx.doi.org/10.2139/ssrn.3372609

Elizabeth A. Gordon

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States
2152046422 (Phone)

Hsiao-Tang Hsu (Contact Author)

Texas A&M University - Corpus Christi ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States

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