Firm Life Cycle and the Disclosure of Estimates and Judgments in Goodwill Impairment Tests: Evidence from Australia

Journal of Contemporary Accounting and Economics, April 2020

Posted: 1 May 2020

See all articles by Humayun Kabir

Humayun Kabir

Auckland University of Technology

Li Su

Auckland University of Technology

Asheq Rahman

Auckland University of Technology - Faculty of Business & Law

Date Written: April 29, 2020

Abstract

The goodwill impairment disclosure literature examines the association between firm-and country-level factors and the disclosure of estimates and judgments used in the goodwill impairment test under International Accounting Standard 36. Although the accounting literature provides competing predictions between firm life cycle and these disclosures, prior studies did not explore the role of firm life cycle in these disclosures. This paper fills in this gap in the literature, and documents that, in Australia, these disclosures vary by life cycle stages and that firm size moderates this association. We, however, find that the differences are more pronounced for some disclosure items than for others.

Keywords: Goodwill impairment; firm life cycle; accounting estimates and judgments; note disclosures; disclosure regulation; Australia

JEL Classification: G34; M41

Suggested Citation

Kabir, Humayun and Su, Li and Rahman, Asheq, Firm Life Cycle and the Disclosure of Estimates and Judgments in Goodwill Impairment Tests: Evidence from Australia (April 29, 2020). Journal of Contemporary Accounting and Economics, April 2020, Available at SSRN: https://ssrn.com/abstract=3589893

Humayun Kabir (Contact Author)

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand
+64 21 08309355 (Phone)

Li Su

Auckland University of Technology

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

Asheq Rahman

Auckland University of Technology - Faculty of Business & Law ( email )

3 Wakefield Street
Private Bag 92006
Auckland Central 1020
New Zealand

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