IDEAS home Printed from
   My bibliography  Save this article

What Determines Goodwill Impairment?


  • Arnt Verriest
  • Ann Gaeremynck


This study investigates determinants of goodwill impairment decisions and their disclosure quality. Under IAS36 goodwill is subject to an annual impairment test in which the carrying amount of goodwill is not allowed to exceed the recoverable amount. However, valuing this recoverable amount is subject to substantial managerial discretion. Therefore, we predict that ownership concentration, corporate governance quality and firm performance provide incentives for managers to engage in goodwill impairment or not, and thus determine financial reporting quality. We construct a sample of firms that should engage in goodwill impairment. Our results convey that better performing firms and firms with stronger corporate governance mechanisms are more likely to impair. Further, ownership structure and governance have a weak impact on the degree of impairment disclosure.

Suggested Citation

  • Arnt Verriest & Ann Gaeremynck, 2009. "What Determines Goodwill Impairment?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business, Review of Business and Economic Literature, vol. 0(2), pages 106-128.
  • Handle: RePEc:ete:revbec:20090201

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    representation; elections; Parliament; self-employed; employers’organisations;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:revbec:20090201. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.