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  • December 2012
  • Article

Evidence on the Use of Unverifiable Estimates in Required Goodwill Impairment

By: Karthik Ramanna and Ross L. Watts
SFAS 142 requires managers to estimate the current fair value of goodwill to determine goodwill write-offs. In promulgating the standard, the FASB predicted managers will, on average, use the fair value estimates to convey private information on future cash flows. The... View Details
Keywords: Goodwill Impairment; Fair-value Accounting; FASB; SFAS 142; Fair Value Accounting; Standards; Cash Flow; Agency Theory; Motivation and Incentives; Forecasting and Prediction; Goodwill Accounting
Related
  • 14 Aug 2009
  • Working Paper Summaries

Insider Trading Preceding Goodwill Impairments

Keywords: by Karl A. Muller III, Monica Neamtiu & Edward J. Riedl
  • 19 Apr 2011
  • Working Paper Summaries

Top Executive Background and Financial Reporting Choice: The Case of Goodwill Impairment

Keywords: by Francois Brochet & Kyle Welch; Accounting
  • January 1994
  • Article

Proposed U.S. Asset Impairment Standard: Goodwill Writedowns Okayed

By: David F. Hawkins
Keywords: Assets; United States
Related
  • October 2008
  • Case

The Talbots, Inc., and Subsidiaries: Accounting for Goodwill

By: William J. Bruns Jr.
In 2006, Talbots, Inc., a specialty women's retailer, purchased a competitor, J. Jill. The transaction created a large goodwill account along with accounts for trademarks and other intangible assets. Using prevailing accounting standards (Statement of Financial... View Details
Keywords: FASB; Intangible Assets; Standards; Financial Statements; Goodwill Accounting; Apparel and Accessories Industry; Retail Industry
Related
  • 2007
  • Working Paper

Evidence from Goodwill Non-impairments on the Effects of Unverifiable Fair-Value Accounting

By: Karthik Ramanna and Ross L. Watts
SFAS 142 requires firms to use unverifiable fair-value estimates to determine goodwill impairments. Standard setters suggest managers will use the discretion given by such estimates to convey private information on future cash flows, while agency theory predicts... View Details
Keywords: Fair Value Accounting; Goodwill Accounting; Standards; Agency Theory
Related
  • 2011
  • Working Paper

Top Executive Background and Financial Reporting Choice

By: Francois Brochet and Kyle Travis Welch
We study the role of executive functional background in explaining management discretion in financial reporting. Taking goodwill impairment as our reporting setting, we focus on top executives (CEOs and CFOs) whose employment history includes experience in investment... View Details
Keywords: Financial Reporting; Goodwill Accounting; Experience and Expertise; Decision Choices and Conditions; Managerial Roles; Agency Theory
Related
  • 11 Aug 2009
  • First Look

First Look: August 11, 2009

margin can obscure the more subtle intensive margin effects of changes in financing constraints. Download the paper: http://www.hbs.edu/research/pdf/10-010.pdf Insider Trading Preceding Goodwill Impairments... View Details
Keywords: Martha Lagace
  • Article

Market Reaction to and Valuation of IFRS Reconciliation Adjustments: First Evidence from the UK

By: Joanne Horton and George Serafeim
We investigate the market reaction to, and the value-relevance of, information contained in the mandatory transitional documents required by International Financial Reporting Standards (IFRS) 1 (2005). We find significant negative abnormal returns for firms reporting... View Details
Keywords: Valuation; Markets; Information; International Finance; Earnings Management; Stock Shares; Taxation; Goodwill Accounting; Price; Financial Reporting; Standards; Corporate Disclosure; United Kingdom
Related
  • 2010
  • Other Unpublished Work

Top Executive Background and Corporate M&A: The Case of Former Investment Bankers

By: Francois Brochet and Kyle Welch
We study the M&A activity of firms with top executives whose employment history includes experience in a Wall Street firm, especially those with investment banking background ("IB executives"). In terms of strategy, controlling for firm-level effects, we document that... View Details
Keywords: Managerial Roles; Reputation; Investment Banking; Financial Reporting; Mergers and Acquisitions; Social and Collaborative Networks; Goodwill Accounting; Power and Influence; Banking Industry
Related
  • Research Summary

Current Research

Information Dissemination in Capital Markets

 

Seeking to bridge economic theory and the role of individuals, Professor Brochet researches the transmission of information in capital markets. He has investigated the effects of information... View Details
  • 08 Mar 2011
  • First Look

First Look: March 8

http://www.hbs.edu/research/pdf/11-081.pdf Top Executive Background and Financial Reporting Choice: The Case of Goodwill Impairment Authors:Francois Brochet and Kyle Welch Abstract We study the role of... View Details
Keywords: Sean Silverthorne
  • 06 Apr 2010
  • First Look

First Look: April 6

quality. Download the paper: http://ssrn.com/abstract=1557231 Evidence on the Use of Unverifiable Estimates in Required Goodwill Impairment Authors: Karthik Ramanna and Ross L Watts Abstract SFAS 142... View Details
Keywords: Martha Lagace
  • 10 Jun 2008
  • First Look

First Look: June 10, 2008

managers will use the discretion given by such estimates to convey private information on future cash flows, while agency theory predicts managers will use the discretion opportunistically. We test these alternative hypotheses using a sample of firms with market... View Details
Keywords: Martha Lagace
  • 12 Jul 2011
  • First Look

First Look: July 12

the Use of Unverifiable Estimates in Required Goodwill Impairment Authors:Karthik Ramanna and Ross L. Watts Publication:Review of Accounting Studies (forthcoming) Abstract SFAS 142 requires managers to... View Details
Keywords: Carmen Nobel
  • 18 Sep 2007
  • First Look

First Look: September 18, 2007

gives firms discretion to manage impairments. We test this argument in a sample of firms with market indications of impairment (firms with book goodwill and market-to-book ratio below one). We find that the... View Details
Keywords: Martha Lagace
  • 20 Jul 2010
  • First Look

First Look: July 20

payments, and deferred taxes are incrementally value-relevant but that only the impairment of goodwill and deferred taxes reveal new information. Our results indicate that mandatory IFRS adoption alters... View Details
Keywords: Martha Lagace
  • 05 Feb 2008
  • First Look

First Look: February 5, 2008

Our analysis focuses on the forecasting process and how it mediates and accommodates the functional biases that can impair the forecast accuracy. We categorize the sources of functional bias into intentional, driven by misalignment of... View Details
Keywords: Martha Lagace