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Is older goodwill value relevant?

Bugeja, Martin & Gallery, Natalie (2006) Is older goodwill value relevant? Accounting and Finance, 46(4), pp. 519-535.

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Abstract

Although prior research has generally found that goodwill reported in firms' financial reports is relevant to equity valuation, no known studies have directly examined whether the value-relevance of purchased goodwill holds as it ages. We examine this issue in the Australian context to determine whether the market attaches different values to the components of Australian firms' goodwill when it is disaggregated into different 'ages'. Our results suggest that recently acquired goodwill has information content whereas 'older' goodwill does not. Our findings have implications for goodwill accounting practice and recent changes to goodwill accounting standards.

Impact and interest:

12 citations in Scopus
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ID Code: 5423
Item Type: Journal Article
Keywords: Accounting standards, Goodwill, Value relevance
DOI: 10.1111/j.1467-629X.2006.00181.x
ISSN: 1467-629X
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Financial Accounting (150103)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2006 Blackwell Publishing
Copyright Statement: The definitive version is available at www.blackwell-synergy.com
Deposited On: 14 Nov 2006
Last Modified: 29 Feb 2012 23:21

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