Disclosure of Goodwill Impairment in the Baltic States
Keywords:goodwill impairment, IFRS, earnings management, disclosure of goodwill
International accounting standards provide recommendations that specify which factors should be taken into consideration prior to the determination of goodwill impairment; however, decisions on goodwill impairment disclosures are mainly conditioned by the influence of managers and other factors based on self-interests. Therefore, the objective of the article is to perform research on goodwill impairment managed by companies that are listed by the NASDAQ OMX Baltic Stock Exchange and to determine factors and causes influencing decisions on goodwill impairment. Findings show that the replacement of managers has an effect on disclosing losses of goodwill impairment. In addition, companies are inclined to recognize goodwill impairment losses under the most favourable circumstances. The indebted companies are more inclined to disclose goodwill impairment. Furthermore, results of the study demonstrated that an economic crisis experienced by a country affects the disclosure of goodwill impairment; however, it does not have an effect on the written-off quantity of goodwill amounts.