IDEAS home Printed from https://ideas.repec.org/a/ibn/ibrjnl/v9y2016i11p65-69.html
   My bibliography  Save this article

The Timing of Goodwill Write-off: Cases of Initial Overpayment

Author

Listed:
  • Jamaliah Abdul Majid
  • Robiah Abu Bakar
  • Nor Asma Lode

Abstract

This paper explores types of accounting choice related to reporting goodwill impairment losses, if any, exercised by Malaysian listed firms after an implementation of IFRS 3. The study is carried out through an in-depth analysis of annual reports for fifteen firms over a number of years. The fifteen firms selected are those that have goodwill arising from business combinations in December 2006/7, reported goodwill impairment losses in the current year or the future year(s), and the goodwill represents 50% or more of the acquisition price. Results show that of the fifteen firms examined, eight firms appeared to exercise the accounting choice in the form of opportunistic timing in reporting the impairment losses. The study contributes to the accounting choice literature by providing evidence on the timing of goodwill impairment losses for goodwill that arose from an apparent overpayment made at the time of an acquisition of a subsidiary.

Suggested Citation

  • Jamaliah Abdul Majid & Robiah Abu Bakar & Nor Asma Lode, 2016. "The Timing of Goodwill Write-off: Cases of Initial Overpayment," International Business Research, Canadian Center of Science and Education, vol. 9(11), pages 65-69, November.
    • Handle: RePEc:ibn:ibrjnl:v:9:y:2016:i:11:p:65-69
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/view/63227/34316
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/view/63227
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Francis, Jennifer, 2001. "Discussion of empirical research on accounting choice," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 309-319, September.
    2. Abdul Majid, Jamaliah, 2015. "Reporting incentives, ownership concentration by the largest outside shareholder, and reported goodwill impairment losses," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(3), pages 199-214.
    3. Erlend Kvaal & Christopher Nobes, 2010. "International differences in IFRS policy choice: A research note," Accounting and Business Research, Taylor & Francis Journals, vol. 40(2), pages 173-187.
    4. Fields, Thomas D. & Lys, Thomas Z. & Vincent, Linda, 2001. "Empirical research on accounting choice," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 255-307, September.
    5. Francis, J & Hanna, JD & Vincent, L, 1996. "Causes and effects of discretionary asset write-offs," Journal of Accounting Research, Wiley Blackwell, vol. 34, pages 117-134.
    6. Kaiying Ji, 2013. "Better Late than Never, the Timing of Goodwill Impairment Testing in Australia," Australian Accounting Review, CPA Australia, vol. 23(4), pages 369-379, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iatridis, George, 2010. "International Financial Reporting Standards and the quality of financial statement information," International Review of Financial Analysis, Elsevier, vol. 19(3), pages 193-204, June.
    2. Hongwen Han & Jiali Jenna Tang & Qingquan Tang, 2021. "Goodwill Impairment, Securities Analysts, and Information Transparency," European Accounting Review, Taylor & Francis Journals, vol. 30(4), pages 767-799, August.
    3. Iatridis, George & Valahi, Styliani, 2010. "Voluntary IAS 1 accounting disclosures prior to official IAS adoption: An empirical investigation of UK firms," Research in International Business and Finance, Elsevier, vol. 24(1), pages 1-14, January.
    4. Andrei Filip & Thomas Jeanjean & Luc Paugam, 2015. "Using Real Activities to Avoid Goodwill Impairment Losses: Evidence and Effect on Future Performance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 42(3-4), pages 515-554, April.
    5. Abdul Majid, Jamaliah, 2015. "Reporting incentives, ownership concentration by the largest outside shareholder, and reported goodwill impairment losses," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(3), pages 199-214.
    6. Libby, Robert & Rennekamp, Kristina M. & Seybert, Nicholas, 2015. "Regulation and the interdependent roles of managers, auditors, and directors in earnings management and accounting choice," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 25-42.
    7. Wen, He & Moehrle, Stephen R., 2016. "Accounting for goodwill: An academic literature review and analysis to inform the debate," Research in Accounting Regulation, Elsevier, vol. 28(1), pages 11-21.
    8. Ping-Sheng Koh, 2005. "Institutional Ownership and Income Smoothing: Australian Evidence," Accounting Research Journal, Emerald Group Publishing, vol. 18(2), pages 93-110, September.
    9. Anne Beatty & Lin Cheng & Tzachi Zach, 2019. "Nonrecurring Items in Debt Contracts," Contemporary Accounting Research, John Wiley & Sons, vol. 36(1), pages 139-167, March.
    10. Emmanuel Iatridis, George, 2018. "Accounting discretion and executive cash compensation: An empirical investigation of corporate governance, credit ratings and firm value," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 55(C), pages 29-49.
    11. Nicola Giuseppe Castellano & Katia Corsi & Roberto Del Gobbo, 2015. "Goodwill Disclosure in Europe. Profiles of disclosing companies," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 1(2), pages 32-65.
    12. Hahn, Sebastian, 2021. "The Role of Large Institutional Ownership on Goodwill Impairment under the SFAS 142 Regime," Junior Management Science (JUMS), Junior Management Science e. V., vol. 6(2), pages 408-423.
    13. Olante, Maria Elena & Lassini, Ugo, 2022. "Investment property: Fair value or cost model? Recent evidence from the application of IAS 40 in Europe," Advances in accounting, Elsevier, vol. 56(C).
    14. Tadeusz Dudycz & Jadwiga Praźników, 2020. "Does the Mark-to-Model Fair Value Measure Make Assets Impairment Noisy?: A Literature Review," Sustainability, MDPI, vol. 12(4), pages 1-24, February.
    15. Ferramosca, Silvia & Allegrini, Marco, 2021. "Impairment or amortization of goodwill? An analysis of CFO perceptions of goodwill accounting," European Management Journal, Elsevier, vol. 39(6), pages 816-828.
    16. repec:eeb:15v1n2:v:1:y:2015:i:2:p:32-65 is not listed on IDEAS
    17. Brian Rutherford, 2010. "The social scientific turn in UK financial accounting research: A philosophical and sociological analysis," Accounting and Business Research, Taylor & Francis Journals, vol. 40(2), pages 149-171.
    18. Chia-Ling Chao & Shwu-Min Horng, 2013. "Asset write-offs discretion and accruals management in Taiwan: the role of corporate governance," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 41-74, January.
    19. Ann Jorissen & David Otley, 2010. "The management of accounting numbers: Case study evidence from the ‘crash’ of an airline," Accounting and Business Research, Taylor & Francis Journals, vol. 40(1), pages 3-38.
    20. Bräuning, Michael & Hüllermeier, Eyke & Keller, Tobias & Glaum, Martin, 2017. "Lexicographic preferences for predictive modeling of human decision making: A new machine learning method with an application in accounting," European Journal of Operational Research, Elsevier, vol. 258(1), pages 295-306.
    21. Marco Fasan & Carlo Marcon, 2018. "Accounting Choice under IFRS: The Role of Accounting Tradition and Managerial Opportunism," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(3), pages 209-223, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    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:ibn:ibrjnl:v:9:y:2016:i:11:p:65-69. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.