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How does economic policy uncertainty influence the timeliness of goodwill impairment? Australian evidence

Author

Listed:
  • Yi Shi
  • Haiyan Jiang
  • Colly He

    (Department of Accounting and Corporate Governance, Macquarie University, Sydney, NSW, Australia)

  • Larelle (Ellie) Chapple

    (QUT Business School, Queensland University of Technology, Brisbane, QLD, Australia)

Abstract

This article investigates the effect of economic policy uncertainty (EPU) on Australian-listed firms’ decisions regarding goodwill impairment loss recognition. Australia has experienced frequent political leadership turnover at a federal level since 2008, increasing policy uncertainty. Using an index measure of EPU, our analyses show that EPU attenuates the timeliness of goodwill impairment, and this impact is more pronounced in firms that are mature, with severe financial constraints, and are in economically important states. To mitigate potential noise in the market-based indicator of impairment losses during periods of high EPU, we adopt a non-market-based indicator, and the results corroborate that goodwill impairment disclosure is potentially unreliable for investors’ decision-making during economic uncertainty. The findings remain robust after addressing potential endogeneity, controlling for measurement errors, business cycles and other macroeconomic confounding factors. JEL Classification : G32, M41

Suggested Citation

  • Yi Shi & Haiyan Jiang & Colly He & Larelle (Ellie) Chapple, 2026. "How does economic policy uncertainty influence the timeliness of goodwill impairment? Australian evidence," Australian Journal of Management, Australian School of Business, vol. 51(3), pages 829-861, August.
    • Handle: RePEc:sae:ausman:v:51:y:2026:i:3:p:829-861
    DOI: 10.1177/03128962251350343
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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