Is Older Goodwill Value Relevant?

17 Pages Posted: 20 Oct 2006

See all articles by Martin Bugeja

Martin Bugeja

University of Technology, Sydney; Financial Research Network (FIRN)

Natalie Gallery

Queensland University of Technology


Although previous research has generally found that goodwill reported in firms financial reports is relevant to equity valuation, no known studies have directly examined whether the value-relevance of purchased goodwill holds as it 'ages'. We examine this issue in the Australian context to determine whether the market attaches different values to the components of Australian firms goodwill when it is disaggregated into different ages. Our results suggest that recently acquired goodwill has information content whereas 'older' goodwill does not. Our findings have implications for goodwill accounting practice and recent changes to goodwill accounting standards.

Suggested Citation

Bugeja, Martin and Gallery, Natalie, Is Older Goodwill Value Relevant?. Accounting and Finance, Vol. 46, No. 4, pp. 519-535, December 2006, Available at SSRN: or

Martin Bugeja (Contact Author)

University of Technology, Sydney ( email )

61 2 9514 3743 (Phone)
61 2 9514 3669 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia 4071 Brisbane


Natalie Gallery

Queensland University of Technology ( email )

School of Accountancy
GPO Box 2434
Brisbane, Queensland 4001

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