Disclosure of Goodwill Impairment in the Baltic States

Šapkauskienė, Alfreda; Leitonienė, Šviesa; Vainiusiene, Eligija

doi:10.5755/j01.ee.27.4.15360

Cited by 6 publications

(10 citation statements)

References 26 publications

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“…The mean difference in Lev between the two groups is 0.056, significant at the 1 % level. This finding coincides with the studies by the scientists Jahmani (2010) and Sapkauskiene et al (2016), which found that the more indebted companies are likely to disclose the goodwill impairment, and are likely to disclose larger amount of goodwill impairment. The mean difference in Loss_dum between the two groups is 0.202, significant at the 1 % level.…”

Section: Correlation Testsupporting

confidence: 91%

“…But, the correlation coefficient between Lev and Imp is 0.09, positive significant at the 1% level . This finding is in contrary to the results of the studies carried out by Beatty & Weber (2006), Zang (2008), AbuGhazalech et al (2011, as well as Ramanna & Watts (2012), but coincides with studies carried out by Jahmani (2010) and Sapkauskiene et al (2016) .The correlation coefficient between Loss_dum and Imp is 0.47, significant at the 1 % level. This indicates that the loss of performance variable is positively correlated with the impaired continuous variable, and if the company has already lost, the manager will tend to recognize more goodwill impairment to carry out a "big bath".…”

Section: Descriptive Analysis Of Study Samplecontrasting

confidence: 57%

“…Other researchers have demonstrated that the adoption of the SFAS 142 standard enhances the ability of goodwill to predict future operating cash flow, and manager discretion has no effect on the ability of goodwill to predict future cash flow (Jarva, 2009;Lee, 2011). Sapkauskiene et al (2016), from the perspective of macroeconomics, found that economic crisis will affect the disclosure of corporate goodwill impairment. To obtain higher economic benefits when the economic environment recovers, enterprises are more inclined toward higher impairment during economic crisis to reserve profit space in the future.…”

Section: Literature On Goodwill Impairmentmentioning

confidence: 99%

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Research on the Signal Effect of Performance Compensation Commitment on the Impairment of Goodwill in China

Deng

2019

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This study using empirical research method and taking 1233 samples of A-share listed companies in China that completed major asset restructuring from 2007 to 2017, examines the signal effect of performance compensation commitment on goodwill impairment, and the impact of agency motivations on the signal effect based on the proportion of the performance compensation commitment that M&A targets achieve. I find evidence suggesting that the higher the proportion of the unfulfilled performance compensation commitment is, the higher the probability of goodwill impairment and the greater the amount of goodwill impairment. In addition, agency motivations affect the signal effect of performance compensation commitment on the impairment of goodwill. Specifically, for companies facing market return pressure and debt contracting pressure, the signal effect of the performance compensation commitment on the impairment of goodwill will be weakened. Furthermore, companies with performance loss have the incentive to use goodwill impairment to carry out a “big bath” and the loss motivation will lead to the overexpression of the signal effect of performance compensation commitment on goodwill impairment. The findings of this paper provide a new perspective for external users of financial statements to observe goodwill impairment and help them better understand managers’ opportunistic motivations to accrue goodwill impairment.

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Section: Correlation Testsupporting

confidence: 91%

Section: Descriptive Analysis Of Study Samplecontrasting

confidence: 57%

Section: Literature On Goodwill Impairmentmentioning

confidence: 99%

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Research on the Signal Effect of Performance Compensation Commitment on the Impairment of Goodwill in China

Deng

2019

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“…It seems to be the most representative way for researchers to measure the factors influencing write-offs. Many regression variants can be found in the data sample, for example, the ordinary least squares (OLS) regression model [28,29] and the probit model, whereby the dependent variable can only take two values to find the explanatory variables for the impairment decision [30]. To determine the impact of hypothesised drivers on the write-off decision, Garrod et al [31] estimated four separate logistic regressions for the companies included in the total sample.…”

Section: Data Sample Characteristicsmentioning

confidence: 99%

“…Hayn and Hughes [61] measured the impairment indicators in acquisitions. They intended to understand whether investors can predict goodwill impairment based on financial statements, and they assumed that their ability to do so is highly limited (as also assumed by Sapkauskiene et al [29], basically due to the quality of those statements. They also showed that the disclosure of the impairment is mainly delayed and taken after the entity has experienced a worse condition for a considerable period.…”

Section: Asset Impairment As An Opportunity For Earnings Managementmentioning

confidence: 99%

Does the Mark-to-Model Fair Value Measure Make Assets Impairment Noisy?: A Literature Review

Dudycz

Praźników

2020

Sustainability

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With the purpose of reporting high-quality, transparent, and comparable information in financial statements, there is a strong, visible trend towards the implementation and use of International Financial Reporting Standards (IFRS), which represent the Anglo-American accounting model. According to IFRS, the fair value has become a dominant measurement paradigm. The purpose of this paper is to examine the implications of the implementation of the mark-to-model fair value measures for asset impairment tests on the relevance and reliability of information presented in financial reports. Among the three levels of the fair value hierarchy, mark-to-model is most controversial because it is susceptible to manipulation and has poor verifiability. After a systematic literature review and a synthesis of high-quality contributions in this field, we conclude that the implementation of asset impairment tests, that use the mark-to-model fair value measures, is not promising for increasing the quality and reliability of the information presented in financial statements. Unfortunately, research has shown that companies are using that tool to manage their earnings and promote managers' unethical behaviour. Furthermore, capital markets' reaction to asset impairment announcements is negative. Performed analysis can provide valuable pointers for standard setters, accounting policy makers, and researchers.

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Combining lean and green practices to achieve a superior performance: The contribution for a sustainable development and competitiveness—An empirical study on the Portuguese context

Teixeira

Coelho

Fontoura

et al. 2022

Corp Soc Responsibility Env

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This research assesses the lean and green (LG) practices' impact on the competitive advantage (CA) of organizations, through sustainable performance, considering lean maturity as the moderator. A structured questionnaire was used to collect data from a cross-sectional sample of 261 companies operating in Portugal. Hypotheses are tested through structural equation modeling and multigroup analysis to examine the lean maturity moderating role. Results demonstrate a positive impact of LG practices on sustainable development and that their three dimensions of CA, with lean maturity boosting most relationships. This research highlights the impact of LG practices on organization's competitiveness and helps them underpin the importance these practices when comes to enhance their sustainable performance and their CA with help of environmental policy and also stakeholder engagement. Future studies should address these relationships upon a specific dimension, namely the correlation between environmental performance and CA, as it was not dealt in this study.

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Disclosure of Goodwill Impairment in the Baltic States

Cited by 6 publications

References 26 publications

Research on the Signal Effect of Performance Compensation Commitment on the Impairment of Goodwill in China

Research on the Signal Effect of Performance Compensation Commitment on the Impairment of Goodwill in China

Does the Mark-to-Model Fair Value Measure Make Assets Impairment Noisy?: A Literature Review

Combining lean and green practices to achieve a superior performance: The contribution for a sustainable development and competitiveness—An empirical study on the Portuguese context

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