Accounting Discretion in Fair Value Estimates: An Examination of SFAS 142 Goodwill Impairments

By Anne L. Beatty, Joseph P. Weber. 2006

524 citations recorded by the source corpus.

Subfields: Accounting, Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/48fd82033694115fa86b2d9f31c20e22d903609e

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Citations in the corpus

Overpriced Shares, Ill-Advised Acquisitions, and Goodwill Impairment (2011, unknown): “…information (they do; write-offs predict future cash flows and earnings, Anantharaman 2007), and the managerial incentives affecting the write-offs (goodwill impairment is related to characteristics of debt contracts, managerial bonuses and exchange delisting regulations, Beatty and Weber 2006).”
The Implications of Unverifiable Fair-Value Accounting: Evidence from the Political Economy of Goodwill Accounting (2008, background): “19 Of a sample of 503 firms with available covenant data and MTB < 1, Beatty and Weber (2006) find that 288 (57%) had covenants that were unlikely to be affected by goodwill.”
The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting (2010, background): “Beatty and Weber (2006) examine the interaction between covenant tightness and the flexibility to include accounting changes in contract calculations on the adoption decisions associated with SFAS 142.”
Causes and consequences of goodwill impairment losses (2011, methodology): “based on Beatty and Weber (2006) in columns (2) and (5), and the unpredictable component of impairment loss (i.”
The Information Content of Goodwill Impairments and SFAS 142 (2011, methodology): “Because of strategic use of adoption period write-offs (Beatty & Weber, 2006), we have eliminated the adoption period write-offs from our main sample.”
CEO Compensation and Fair Value Accounting: Evidence from Purchase Price Allocation (2010, unknown): “Investigating the determinants of firms’ initial impairment tests under SFAS 142, Beatty and Weber (2006) find that equity market concerns and contracting incentives affect firms’ decision to accelerate or delay the impairment recognition.”
Corporate investment and changes in GAAP (2016, unknown): “For example, Beatty and Weber (2006) find evidence that contracting incentives created by the presence of debt covenants cause firms to postpone goodwill impairments rather than immediately book a below-the-line expense upon the adoption of SFAS 142 (Accounting for Goodwill).”
The role of information asymmetry and financial reporting quality in debt trading: Evidence from the secondary loan market $ (2008, unknown): “Thus, Beatty et al. (2008) find that conservative covenant adjustments and financial reporting conservatism complement rather than substitute for each other in satisfying debt holders’ demand for conservatism.”
Has goodwill accounting gone bad? (2017, background): “When discussing Beatty and Weber (2006), Bens (2006) points out that when allowing management the discretion in FAS 142, it is unclear “whether there are real costs that are not already included in share prices and the various agency contracts”.”
Do Firms Manage Fair Value Estimates? An Examination of SFAS 142 Goodwill Impairments (2009, unknown): “17 Beatty and Weber (2006) examine an accounting choice that managers made upon adoption of SFAS 142.”
Towards an Understanding of the Phases of Goodwill Accounting in Four Western Capitalist Countries: From Stakeholder Model to Shareholder Model (2008, background): “Beatty and Weber (2006) show empirically that in the adoption of SFAS 142, firms’ equity market concerns affect their preference for above-theline vs. below-the-line accounting treatment of goodwill, and firms’ debt contracting, bonus, turnover, and exchange delisting incentives affect their…”
The Adoption of IFRS 3: The Effects of Managerial Discretion and Stock Market Reactions (2011, methodology): “Numerous studies of accounting change suggest managers use discretion in response to economic incentives (Francis et al., 1996; D’Souza et al., 2000; Fields et al., 2001; Beatty and Weber, 2006; Ramanna and Watts, 2009).”
Evidence on the use of unverifiable estimates in required goodwill impairment (2012, unknown): “Beatty and Weber (2006) also study the role of agency-based incentives in the implementation of SFAS 142, but in its adoption year.”