Reviewing IFRS Goodwill Accounting Research: Implementation Effects and Cross-Country Differences

Anne d'Arcy, Ann Tarca

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

We review 42 studies from 2008 to early 2017 about IFRS goodwill accounting choices for recognition, impairment, and disclosure of goodwill, focusing on cross-country evidence of implementation effects. We develop a model of application of goodwill accounting based on IFRS 3, IAS 36, and country- and firm-level influences to analyze the research and to summarize existing evidence about goodwill accounting choices. We report evidence in support of IFRS accounting for goodwill recognition, impairment, and disclosure from many countries. However, evidence regarding value relevance is mixed. Overall, there is a lack of cross-country evidence regarding factors affecting goodwill accounting. Many studies show goodwill recognition, impairment, and disclosure are associated with economic and firm factors, and there is some evidence about the impact of managerial incentives and a lack of timeliness in impairment recognition. There is scope for more cross-country studies showing how institutional factors affect the application of IFRS 3 and IAS 36.

Original languageEnglish
Pages (from-to)203-226
Number of pages24
JournalInternational Journal of Accounting
Volume53
Issue number3
DOIs
Publication statusPublished - 1 Sep 2018

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Accounting research
International Financial Reporting Standards
Country differences
Goodwill accounting
Reviewing
Impairment
Disclosure
Goodwill
Factors
Accounting choice
Managerial incentives
Timeliness
Value relevance
Cross-country study
Economics
Institutional factors

Cite this

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abstract = "We review 42 studies from 2008 to early 2017 about IFRS goodwill accounting choices for recognition, impairment, and disclosure of goodwill, focusing on cross-country evidence of implementation effects. We develop a model of application of goodwill accounting based on IFRS 3, IAS 36, and country- and firm-level influences to analyze the research and to summarize existing evidence about goodwill accounting choices. We report evidence in support of IFRS accounting for goodwill recognition, impairment, and disclosure from many countries. However, evidence regarding value relevance is mixed. Overall, there is a lack of cross-country evidence regarding factors affecting goodwill accounting. Many studies show goodwill recognition, impairment, and disclosure are associated with economic and firm factors, and there is some evidence about the impact of managerial incentives and a lack of timeliness in impairment recognition. There is scope for more cross-country studies showing how institutional factors affect the application of IFRS 3 and IAS 36.",
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Reviewing IFRS Goodwill Accounting Research : Implementation Effects and Cross-Country Differences. / d'Arcy, Anne; Tarca, Ann.

In: International Journal of Accounting, Vol. 53, No. 3, 01.09.2018, p. 203-226.

Research output: Contribution to journalArticle

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