The Amount and Timing of Goodwill Write-Offs and Revaluations: Evidence from U.S. and U.K. Firms |
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| Authors: | Henning Steven L Shaw Wayne H Stock Toby |
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| Institution: | (1) Edwin L. Cox School of Business, Southern Methodist University, PO Box 75033, Dallas, Texas 75275-0333, USA;(2) College of Business, 526 Copeland Hall, Ohio University, Athens, OH 45701-2979, USA |
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| Abstract: | This paper investigates criticisms that U.S. GAAP had given firms too much discretion in determining the amount and timing of goodwill write-offs. Using 1,576 U.S. and 563 U.K. acquisitions, we find little evidence that U.S. firms managed the amount of goodwill write-off or that U.K. firms managed the amount of revaluations (write-ups of intangible assets). However, our results are consistent with U.S. firms delaying goodwill write-offs and U.K. firms timing revaluations strategically to avoid shareholder approval linked to certain financial ratios. |
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| Keywords: | goodwill impairments intangible assets managerial incentives |
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