Manager’s misinterpretation of goodwill impairments: Evidence from German listed companies

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet


This study investigates the reported goodwill of German listed companies between 2009 and 2014 and focuses on opportunistic behaviour by managers applying the impairment only approach (IOA) in accordance with IAS 36. Contributing to the literature on goodwill accounting, this investigation examines changes of CEOs and companies’ financial situation, showing that the profit trend is an indicator of goodwill impairments. The results also indicate that new CEOs show a tendency for big bath accounting when taking office and therefore write off more goodwill than incumbent CEOs. Moreover, managers are more likely to impair goodwill when current earnings are negative, especially after decreases in earnings above the annual average. On the other hand, managers tend to avoid goodwill impairments when earnings decrease significantly but still remain positive.

ZeitschriftInternational Journal of Accounting, Auditing and Performance Evaluation
Seiten (von - bis)168-190
Anzahl der Seiten23
PublikationsstatusErschienen - 2019

Zugehörige Projekte

  • Determinants and consequences of goodwill impairments - Literature review and empirical evidence from Germany

    Projekt: Dissertationsprojekt