Back to goodwill amortisation and the financial performance of public and private firms in Spain

  1. Peón, David 1
  2. Ruiz, Fernando 1
  1. 1 University of A Coruna, A Coruña-SPAIN
Revista:
Revista de contabilidad = Spanish accounting review: [RC-SAR]

ISSN: 1138-4891

Ano de publicación: 2024

Volume: 27

Número: 1

Páxinas: 146-159

Tipo: Artigo

DOI: 10.6018/RCSAR.503021 DIALNET GOOGLE SCHOLAR lock_openDIGITUM editor

Outras publicacións en: Revista de contabilidad = Spanish accounting review: [RC-SAR]

Resumo

Aprovechamos el cambio en la regulación del fondo de comercio en España a partir de 2016, para analizar un escenario escasamente estudiado en la literatura reciente: la transición inversa del deterioro del fondo de comercio a la amortización sistemática del mismo. Construyendo una base de datos a partir de los estados financieros individuales de todas las empresas no financieras españolas, cotizadas y no cotizadas, con fondo de comercio positivo en balance, contribuimos a la literatura en dos instancias. Por un lado, tratamos de obtener evidencia de si los gestores se comportaron de forma oportunista durante el periodo de regulación del deterioro mediante un test de los determinantes del reconocimiento del deterioro del fondo de comercio. Por otro lado, mediante un enfoque de diferencias en diferencias frente a una muestra de 4.000 empresas de control, comprobamos el impacto diferencial del cambio en la regulación sobre la rentabilidad de los activos de aquellas empresas con fondo de comercio en sus balances. Nuestros resultados concuerdan con las investigaciones existentes, que sugieren que la amortización sistemática del fondo de comercio, junto con una prueba periódica de deterioro, limitan las prácticas de gestión de beneficios y ayudan a los inversores a evaluar los resultados económicos de una empresa.

Referencias bibliográficas

  • Ahn, S., Cheon, Y.S., & Kim, M. (2020). Determinants of initial goodwill overstatement in affiliated and non-affiliated mergers. Journal of Business Finance and Accounting 47, (5-6), 587-614. https://doi.org/10.1111/jbfa.12442
  • Albersmann, B.T., & Quick, R. (2020). The impact of audit quality indicators on the timeliness of goodwill impairments: evidence from the German setting. Abacus, 56(1), 66-103.
  • Amel-Zadeh, A., Glaum, M., & Sellhorn, T. (2023). Empirical Goodwill Research: Insights, Issues, and Implications for Standard Setting and Future Research. European Accounting Review, 32(2), 415-446. https://doi.org/10.1080/09638180.2021.1983854
  • André, P., Filip, A., & Paugam, L. (2015). The effect of mandatory IFRS adoption on conditional conservatism in Europe. Journal of Business Finance and Accounting, 42, 482–514. https://doi.org/10.1111/jbfa.12105
  • André, P., Filip, A., & Paugam, L. (2016). Examining the patterns of goodwill impairments in Europe and the US. Accounting in Europe, 13(3), 329-352. https://doi.org/10.1080/17449480.2016.1260748
  • Asimakopoulos, I., Samitas, A., & Papadogonas, T. (2009). Firm-specific and economy wide determinants of firm profitability: Greek evidence using panel data. Managerial Finance, 35(11), 930-939. https://doi.org/10.1108/03074350910993818
  • Ayres, D.R., Neal, T.L., Reid, L.C., & Shipman, J.E. (2019). Auditing goodwill in the post-amortization era: Challenges for auditors. Contemporary Accounting Research, 36(1), 82-107. https://doi.org/10.1111/1911-3846.12423
  • Banker, R.D., Basu, S., & Byzalov, D. (2017). Implications of impairment decisions and assets’ cash-flow horizons for conservatism research. Accounting Review, 92(2), 41-67. https://doi.org/10.2308/accr-51524
  • Barberis, N., Shleifer, A., & Vishny, R. (1998). A model of investor sentiment. Journal of Financial Economics, 49(3), 307-343. https://doi.org/10.1016/S0304-405X(98)00027-0
  • Barton, J., & Simko, P.J. (2002). The balance sheet as an earnings management constraint. Accounting Review, 77(Supplement), 1–27. https://doi.org/10.2308/accr.2002.77.s-1.1
  • Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, 24(1), 3-37. https://doi.org/10.1016/S0165-4101(97)00014-1
  • Beatty, A., Weber, J., & Yu, J.J. (2008). Conservatism and debt. Journal of Accounting and Economics, 45, 154-174. https://doi.org/10.1016/j.jacceco.2008.04.005
  • Blasco, M.P., Costa, A., & Olmo, J. (2021). Factores explicativos del deterioro del fondo de comercio en los grupos cotizados españoles. XXI AECA International Conference. UCLM, Toledo, 22-24 September 2021.
  • Carcello, J.V., Neal, T.L., Reid, L.C., & Shipman, J.E. (2020). Auditor independence and fair value accounting: An examination of non-audit fees and goodwill impairments. Contemporary Accounting Research, 37(1), 189-217. https://doi.org/10.1111/1911-3846.12514
  • Carvalho, C., Rodrigues, A.M., & Ferreira, C. (2016). Goodwill and Mandatory Disclosure Compliance: A Critical Review of the Literature. Australian Accounting Review, 26(4), 376-389. https://doi.org/10.1111/auar.12129
  • Cavero Rubio, J.A., Amorós Martínez, A., & Collazo Mazón, A. (2021). Economic effects of goodwill accounting practices: systematic amortisation versus impairment test. Spanish Journal of Finance and Accounting, 50, 224-245. https://doi.org/10.1080/02102412.2020.1778376
  • Cerqueira, A., & Pereira, C. (2020). The effect of economic conditions on accounting conservatism under IFRS in Europe. Review of Economic Perspectives, 20(2), 137-169. https://doi.org/10.2478/revecp-2020-0007
  • Chan, L.K.C., Jegadeesh, N., & Lakonishok, J. (1996). Momentum strategies. Journal of Finance, 51(5), 1681-1713. https://doi.org/10.1111/j.1540-6261.1996.tb05222.x
  • Cheng, Q., Cho, Y.J., & Yang, H. (2018). Financial reporting changes and the internal information environment: Evidence from SFAS 142. Review of Accounting Studies, 23, 347-383. https://doi.org/10.1007/s11142-017-9437-8
  • Chung, B.H., & Hribar, P. (2021). CEO overconfidence and the timeliness of goodwill impairments. The Accounting Review, 96(3), 221–259. https://doi.org/10.1016/j.jbef.2021.100459
  • Cotter, J., Stokes, D., & Wyatt, A. (1998). An analysis of factors influencing asset writedowns. Accounting & Finance, 38(2), 157-179. https://doi.org/10.1111/1467-629X.00008
  • Cowling, M. (2004). The growth–profit nexus. Small Business Economics, 22(1), 1–9.
  • Delmar, F., McKelvie, A., & Wennberg, K. (2013). Untangling the relationships among growth, profitability and survival in new firms. Technovation, 33(8–9), 276–291. https://doi.org/10.1016/j.technovation.2013.02.003
  • Durocher, S., & Georgiou, O. (2022). Framing accounting for goodwill: Intractable controversies between users and standard setters. Critical Perspectives on Accounting. 89, 102357. https://doi.org/10.1016/j.cpa.2021.102357
  • Dutta, S., & Patatoukas, P.N. (2017). Identifying conditional conservatism in financial accounting data: theory and evidence. Accounting Review, 92(4),191-216. https://doi.org/10.2308/accr-51640
  • Filip, A., Jeanjean, T., & Paugam, L. (2015). Using real activities to avoid goodwill impairment losses: Evidence and effect on future performance. Journal of Business Finance & Accounting, 42, 515–554. https://doi.org/10.1111/jbfa.12107
  • Filip, A., Lobo, G.J., & Paugam, L. (2021). Managerial discretion to delay the recognition of goodwill impairment: The role of enforcement. Journal of Business Finance and Accounting, 48(1-2), 36-69. https://doi.org/10.1111/jbfa.12501
  • Francis, J.R., & Martin, X. (2010). Acquisition profitability and timely loss recognition. Journal of Accounting and Economics, 49(1-2), 161–178. https://doi.org/10.1016/j.jacceco.2009.09.003
  • Gietzmann, M., & Wang, Y. (2020). Goodwill valuations certified by independent experts: Bigger and cleaner impairments? Journal of Business Finance and Accounting, 47(1-2), 27-51. https://doi.org/10.1111/jbfa.12411
  • Giner, B., & Pardo, F. (2015). How Ethical are Managers’ Goodwill Impairment Decisions in Spanish-Listed Firms? Journal of Business Ethics, 132, 21-405. https://doi.org/10.1007/s10551-014-2303-8
  • Givoly, D., & Hayn, C. (2000). The changing time-series properties of earnings, cash flows, and accruals: Has financial reporting become more conservative? Journal of Accounting and Economics, 29(3), 287-320. https://doi.org/10.1016/S0165-4101(00)00024-0
  • Glaum, M., Landsman, W.R., & Wyrwa, S. (2018). Goodwill impairment: the effects of public enforcement and monitoring by institutional investors. The Accounting Review, 93(6), 149–180. https://doi.org/10.2308/accr-52006
  • Glaum, M., Schmidt, P., Street, D.L., & Vogel, S. (2013). Compliance with IFRS 3- and IAS 36-required disclosures across 17 European countries: Company- and country-level determinants. Accounting and Business Research, 43(3), 163-204. https://doi.org/10.1080/00014788.2012.711131
  • Gros, M., & Koch, S. (2020). Discretionary goodwill accounting losses in Europe. Journal of Applied Accounting Research, 21(1), 106-124. https://doi.org/10.1108/JAAR-03-2018-0039
  • Gunn, J.L., Khurana, I.K., Stein, S.E. (2018). Determinants and consequences of timely asset impairments during the financial crisis. Journal of Business Finance & Accounting, 45, 3-39. https://doi.org/10.1111/jbfa.12287
  • Han, H., Tang, J.J., & Tang, Q. (2021). Goodwill impairment, securities analysts, and information transparency. European Accounting Review, 30(4), 767-799. https://doi.org/10.1080/09638180.2020.1791725
  • Harris, M., & Raviv, A. (1990). Capital structure and the informational role of debt. The Journal of Finance, 45(2), 321–349. https://doi.org/10.1111/j.1540-6261.1990.tb03693.x
  • Hausman, J., & Taylor, W. (1981). Panel data and unobservable individual effects. Journal of Econometrics, 16(1), 155. https://doi.org/10.1016/0304-4076(81)90085-3
  • Huikku, J., Mouritsen, J., & Silvola, H. (2017). Relative reliability and the recognisable firm: Calculating goodwill impairment value. Accounting, Organization and Society, 56, 68-83. https://doi.org/10.1016/j.aos.2016.03.005
  • Ipinnaiye, O., Dineen, D., & Lenihan, H. (2017). Drivers of SME performance: a holistic and multivariate approach. Small Business Economics, 48(4), 883-911. https://doi.org/10.1007/s11187-016-9819-5
  • Kabir, H., & Rahman, A. (2016). The role of corporate governance in accounting discretion under IFRS: Goodwill impairment in Australia. Journal of Contemporary Accounting & Economics, 12, 290-308. https://doi.org/10.1016/j.jcae.2016.10.001
  • Kabir, H., Su, L., & Rahman, A. (2020). Firm life cycle and the disclosure of estimates and judgments in goodwill impairment tests: Evidence from Australia. Journal of Contemporary Accounting and Economics, 16(3), 100207. https://doi.org/10.1016/j.jcae.2020.100207
  • Khan, M., & Watts, R.L. (2009). Estimation and empirical properties of a firm-year measure of accounting conservatism. Journal of Accounting and Economics, 48, 132–150. https://doi.org/10.1016/j.jacceco.2009.08.002
  • Kim, S., Lee, C., & Wook Yoon, S. (2013). Goodwill accounting and asymmetric timeliness of earnings. Review of Accounting and Finance, 12(2), 112-129. https://doi.org/10.1108/14757701311327687
  • Kim, Y., Li, S., Pan, C., & Zuo, L. (2013). The role of accounting conservatism in the equity market: Evidence from seasoned equity offerings. The Accounting Review, 88, 1327–1356. https://doi.org/10.2308/accr-50420
  • Knauer, T., & Wöhrmann, A. (2016). Market reaction to goodwill impairments. European Accounting Review, 25(3), 421-449. https://doi.org/10.1080/09638180.2015.1042888
  • Labunska, S., Petrova, M., & Prokopishyna, O. (2017). Asset and cost management for innovation activity. Economic Annals XXI,165(5-6), 13-18. https://doi.org/10.21003/ea.V165-03
  • Lawrence, A., Sloan, R., & Sun, Y. (2013). Non-discretionary conservatism: Evidence and implications. Journal of Accounting and Economics, 56, 112–133. https://doi.org/10.1016/j.jacceco.2013.10.005
  • Lazar, L. (2019). Manager’s misinterpretation of goodwill impairments: evidence from German listed companies. International Journal of Accounting, Auditing and Performance Evaluation, 15(2), 168-190. https://doi.org/10.1504/IJAAPE.2019.099144
  • Lev, B. (2018). The deteriorating usefulness of financial report information and how to reverse it. Accounting and Business Research, 48(5), 465-493. https://doi.org/10.1080/00014788.2018.1470138
  • Lhaopadchan, S. (2010). Fair value accounting and intangible assets: Goodwill impairment and managerial choice. Journal of Financial Regulation and Compliance, 18(2), 120-130. https://doi.org/10.1108/13581981011033989
  • Li, K.K., & Sloan, R.G. (2017). Has goodwill accounting gone bad? Review of Accounting Studies, 22, 964-1003. https://doi.org/10.1007/s11142-017-9401-7
  • Li, S. (2016). Managerial ability and goodwill impairment. Advances in Accounting, incorporating Advances in International Accounting, 32, 42-51. https://doi.org/10.1016/j.adiac.2016.02.002
  • Manski, C. (2000). Economic analysis of social interactions. Journal of Economic Perspectives, 14(3), 115-136.
  • Mazzi, F., André, P., Dionysiou, D., & Tsalavoutas, I. (2017). Compliance with goodwill-related mandatory disclosure requirements and the cost of equity capital. Accounting and Business Research, 47(3), 268-312. https://doi.org/10.1080/00014788.2016.1254593
  • Pallarés-Sanchidrián, J., Pérez-García, J., & Gonzalo-Angulo, J.A. (2021). (IR) Relevance of goodwill impairment: the case of European banking (2005-2015). Journal of Banking Regulation, 22(1), 24-38. https://doi.org/10.1057/s41261-020-00126-0.
  • Pardo, F., & Giner, B. (2022), "Is goodwill impairment disclosure used as an impression management strategy?", Baltic Journal of Management, 17(4), 429-446. https://doi.org/10.1108/BJM-01-2022-0010
  • Ruiz F., & Peón, D. (2021). Change in goodwill regulation: impact on security mispricing of listed firms. XXI AECA International Conference. UCLM, Toledo, 22-24 September 2021.
  • Ryan, S. (2006). Identifying conditional conservatism. European Accounting Review, 15, 511–525. https://doi.org/10.1080/09638180601102099
  • Schatt, A., Doukakis, L., Bessieux-Ollier, C., & Walliser, E. (2016). Do goodwill impairments by European firms provide useful information to investors? Accounting in Europe, 13(3), 307-327. https://doi.org/10.1080/17449480.2016.1254348
  • Shepardson, M.L. (2019). Effects of individual task-specific experience in audit committee oversight of financial reporting outcomes. Accounting, Organizations and Society, 74, 56-74. https://doi.org/10.1016/j.aos.2018.07.002
  • Shleifer, A. (2000). Inefficient Markets: An Introduction to Behavioral Finance. Oxford, UK: Oxford University Press. https://doi.org/10.1093/0198292279.001.0001
  • Statman, M., & Weng, J.A. (2010). Investment across cultures: Financial Attitudes of Chinese-Americans. Journal of Investment Consulting, 11(1), 37-44.
  • Stein, S.E. (2019). Auditor industry specialization and accounting estimates: Evidence from asset impairments. Auditing, 38(2), 207-234. https://doi.org/10.2308/ajpt-52231
  • Tan, L. (2013). Creditor control rights, state of nature verification and financial reporting conservatism. Journal of Accounting and Economics, 55, 1–22. https://doi.org/10.1016/j.jacceco.2012.08.001
  • Variyam, J.N., & Kraybill, D.S. (1992). Empirical evidence on determinants of firm growth. Economics Letters, 38(1), 31-36. https://doi.org/10.1016/0165-1765(92)90157-T
  • Xiao, M., & Yang, S. (2021). Determinants of exercising discretion in goodwill impairment decisions by listed companies. Journal of Tongji University, 49(9), 1345-52. https://doi.org/10.11908/j.issn.0253-374x.21119
  • Yazdanfar, D. (2013). Profitability determinants among micro firms: Evidence from Swedish data. International Journal of Managerial Finance, 9(2), 151-160. https://doi.org/10.1108/17439131311307565
  • Zhang, J. (2008). The contracting benefits of accounting conservatism to lenders and borrowers. Journal of Accounting and Economics, 45, 27–54. https://doi.org/10.1016/j.jacceco.2007.06.002
Fonte de datos: Dialnet