Goodwill impairments, a delayed or ignored - A study investigating if goodwill impairments within Swedish firms are delayed by three years

University essay from Göteborgs universitet/Företagsekonomiska institutionen

Author: Helena Frick; Josefina Bona; [2013-07-01]

Keywords: ;

Abstract: Howtotreatgoodwillwithinfirms,hasalwaysbeenadiscussionofgreatrelevance.NewstandardswereintroducedtoSwedishlistedfirmsin2005,wherebygoodwillshouldbetestedannuallyforimpairmentsandnolongeramortizedonannualbasis.Sincetheeconomicrecessionin2008Swedishfirmshavemadelessgoodwillimpairmentsthanwhatisreasonabletoexpect,whichhasresultedinexpertsbelievingthatgoodwillimpairmentcanbedelayedbythreetofouryearsfromwhentherealassetlossoccurs.Thereforethepurposeofthisstudyistoinvestigateifathreeyeartimelagexistsornot,whichisexaminedbyourregressionmodel.Thestudyalsotestsfordifferencesingoodwillimpairmentsbetweenthefourindustriesincludedintheresearch.Fromourtest,wecannotstatisticallyshowthatarelationbetweengoodwillimpairmentandmarketcapitalizationexistswithathreeyearstimelag.Thetestsalsoestablishthatdifferentfirmstreatgoodwilldifferently.

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