Description
DISCRETIONARY GOODWILL ACCOUNTING: DOES THE INSTITUTIONAL INVESTORS MATTER?ATM E Karim (University of Portsmouth)
Khaled Professor Hussainey (University of Portsmouth)
Abstract
The discretionary goodwill accounting is a long debated issue in accounting and finance literature. Issuing new standard (IFRS 3‐ Business Combination and SFAS 141 (R)) jointly by International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB) was an attempt to end the debate in this domain. However, rather resolving the issue; IFRS‐3 and SFAS 141 (R) provided new dimension in arguments among the academics and practitioners. Existing goodwill literatures were mainly focused on its’ subsequent treatment (Impairment‐ IAS 36) in relation to other business environmental and macro‐economic factors. However, this study was conducted emphasizing the focus on the evaluation of initial goodwill recognition and measurement. More specifically, this study examine; whether institutional investors have any impact on goodwill recognition during the purchase price allocation (PPA) in ‘Merger and Acquisition’ (M&A) transactions. This study found that, no of institutional investor does not have any influence on the M&A purchase price allocation toward goodwill; rather the percentage of holding matter and the relationship is negative. Moreover, the study identified that both active and passive institutional have significant impact on the recognition of goodwill identification. In addition to that; there was also
statistically significant relationship between the acquire weight on the investor portfolio return and the M&A purchase price allocation and the coefficient of the relation is negative.
Keyword: Goodwill, M&A, IFRS3, Institutional Investor, Corporate Governance.
| Period | 02 Nov 2019 |
|---|---|
| Event type | Conference |
| Location | Doha, Qatar |
| Degree of Recognition | International |