Equity recognition of mandatory accounting changes: the case of transitional goodwill impairment losses

Lapointe‐Antunes, Pascale; Cormier, Denis; Magnan, Michel

doi:10.1002/cjas.41

Cited by 42 publications

(89 citation statements)

References 32 publications

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“…The findings show that in all the models, the coefficient on AUDITCOM is negative and statistically significant. Similar to LapointeAntunes et al (2008), this result supports H3. The result suggests that, as the proportion of independent directors on the au dit committee increases, there is a lower likelihood for the sample firms in Singapore to exercise the choice in recog nizing zero goodwill impairment.…”

Section: Discussion Of the Findingssupporting

confidence: 82%

“…The top managers who were directly involved in the creation of goodwill through business combinations may be reluctant to writeoff the goodwill as doing so would imply that they were unable to realize the expected synergies from the business combi nations (LapointeAntunes et al 2008, MastersStout et al 2008.…”

Section: Ceo Reputationmentioning

confidence: 99%

“…Prior studies suggest that effective governance mechanisms act as a constraint to managerial opportunism related to reporting goodwill impairment (LapointeAntunes et al 2008, Abdul Majid 2015. Corporate governance mecha nisms are normally regarded to be effective when there are a high proportion of audit committee members who are in dependent (AUDITCOM) (LapointeAntunes et al 2008).…”

Section: Constraints To the Recognition Choice: Corporate Governance mentioning

confidence: 99%

“…Corporate governance mecha nisms are normally regarded to be effective when there are a high proportion of audit committee members who are in dependent (AUDITCOM) (LapointeAntunes et al 2008).…”

Section: Constraints To the Recognition Choice: Corporate Governance mentioning

confidence: 99%

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Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Majid

2017

Business: Theory and Practice

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Abstract. This study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010-2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher likelihood of exercising the recognition choice, while a higher proportion of audit committee independence constrains this choice. The policy implication of this study is that to improve the quality of the financial statements, the relevant authorities need to monitor firms' reporting incentives closely. This study contributes to the literature on IFRS by providing evidence that supports the applicability of the debt hypothesis in explaining the decision of Singaporean listed firms to recognize zero goodwill impairment.

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Section: Discussion Of the Findingssupporting

confidence: 82%

Section: Ceo Reputationmentioning

confidence: 99%

Section: Constraints To the Recognition Choice: Corporate Governance mentioning

confidence: 99%

Section: Constraints To the Recognition Choice: Corporate Governance mentioning

confidence: 99%

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Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Majid

2017

Business: Theory and Practice

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“…On the other side, the accounting literature highlighted the effectiveness of firm governance in limiting earnings management generally. Consequently, it would restrict the discretionary overstatements and/or understatements of the goodwill impairment losses reported by firms (Lapointe-Antunes et al, 2008). Following this idea and succeeding prior researches on governance determinants of goodwill impairment losses (Lapointe-Antunes et al, 2008;Guler, 2006;Van de Poel et al, 2009;Noraini & Norman, 2014;Al Dabbous et al, 2015), we hypothesize that firm-governance mechanisms influence the magnitude of goodwill impairment losses reported by French firms under IAS 36.…”

mentioning

confidence: 70%

Determinants of Goodwill Impairment Losses under IAS 36: The French Case

Hassine

Jilani

2017

ijafr

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The present paper investigates the determinants of goodwill impairment losses under IAS 36. More specifically, this study examines the impact of earnings management, corporate governance and financial crisis on goodwill impairment losses reported by French firms following the adoption of IAS 36 on purchased goodwill. Based on a sample of 730 observations from 107 groups of companies that belong to the SBF 250 over the period 2006-2012, the findings of this research confirm largely our predictions. Indeed, main results show that managers impair goodwill to meet earnings management motives linked to CEO change, earnings smoothing, big bath accounting and financial crisis. Moreover, they reveal that French firms impair goodwill to respond to debt renegotiation hypothesis. In addition, the findings demonstrate that French firms audited by a Big Four auditor record lower goodwill impairment losses. Thus, they highlight the role of audit quality to constrain managerial opportunism associated to goodwill impairment. This study illuminates the accounting standard-setters in understanding the determinants of goodwill impairment losses in France under IAS 36. Therefore, it contributes to the international actual debate on goodwill and to the international accounting literature.

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The Relevance of XBRL Voluntary Disclosure for Stock Market Valuation: The Role of Corporate Governance

Cormier¹,

Dufour

Luu

et al. 2018

Can J Adm Sci

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The aim of this paper is to investigate the relevance for stock market pricing of accounting earnings of voluntary disclosures in XBRL files considering the quality of corporate governance. Results are the following. It appears that XBRL extensions attract financial analysts. Good governance is positively associated with voluntary XBRL extensions. We observe that XBRL extensions enhance the positive relationship between accounting earnings and stock price. However, this positive association is reduced for firms with good governance, suggesting a substitution effect between XBRL extensions and corporate governance. Finally, it appears that XBRL extensions would strategically be related to earnings quality. This research highlights the importance to consider governance when assessing the value relevance of XBRL disclosures for stock market pricing.

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Equity recognition of mandatory accounting changes: the case of transitional goodwill impairment losses

Abstract: This study investigates if and how the use of the retroactive method to account for a mandatory accounting change affects a fi rm

Cited by 42 publications

References 32 publications

Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Determinants of Goodwill Impairment Losses under IAS 36: The French Case

The Relevance of XBRL Voluntary Disclosure for Stock Market Valuation: The Role of Corporate Governance

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