Did the goodwill accounting standard impose material economic consequences on Australian acquirers?

James, Kieran and How, Janice and Verhoeven, Peter (2008) Did the goodwill accounting standard impose material economic consequences on Australian acquirers? Accounting and Finance, 48 (4). pp. 625-647. ISSN 0810-5391

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Abstract

This research explores the empirical association between takeover bid premium and acquired (purchased) goodwill, and tests whether the strength of the association changes after the passage of approved accounting standard AASB 1013 in Australia in 1988. AASB 1013 mandated capitalization and amortization of acquired goodwill to the income statement over a maximum period of 20 years. We use regressions to assess how the association between bid premium and acquired goodwill varies in the pre-AASB and post-AASB 1013 periods after controlling for confounding factors. Our results show that reducing the variety of accounting policy options available to bidder management after an acquisition results in a systematic reduction in the strength of the association between premium and goodwill.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version deposited in accordance with the copyright policy of the publisher.
Depositing User: Dr Kieran James
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 28 Oct 2009 06:34
Last Modified: 02 Jul 2013 23:27
Uncontrolled Keywords: accounting choice; bid premium; intangible assets; purchased goodwill; signalling theory
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150101 Accounting Theory and Standards
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150312 Organisational Planning and Management
18 Law and Legal Studies > 1801 Law > 180105 Commercial and Contract Law
Socio-Economic Objective (SEO2008): E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
Identification Number or DOI: doi: 10.1111/j.1467-629x.2007.00246.x
URI: http://eprints.usq.edu.au/id/eprint/5964

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