Goodwill Impairment

In 2001, goodwill amortization in the US was eliminated in favor of an impairment-only approach, which, according to critics, gives managers vast discretion and opportunities for earnings management. Prior research suggests that discretionary asset write-offs are associated with economic factors and managers’ financial reporting objectives. Based on a systematic literature review, this study investigates for a comprehensive sample of US firms the determinants of goodwill write-off behavior. Regression analysis shows that write-off behavior is significantly explained by firms’ economic properties. Only in large, high-profile firms, incentives appear to be significant determinants. These findings suggest that the impairment-only approach does capture goodwill impairment at least to some extent

Intended and unintended consequences of mandatory IFRS adoption: A review of extant evidence and suggestions for future research

This paper discusses empirical evidence on the economic consequences of mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union (EU) and provides suggestions on how future research can add to our understanding of these effects. Based on the explicitly stated objectives of the EU‟s so-called „IAS Regulation‟, we distinguish between intended and unintended consequences of mandatory IFRS adoption. Empirical research on the intended consequences generally fails to document an increase in the comparability or transparency of financial statements. In contrast, there is rich and almost unanimous evidence of positive effects on capital markets and at the macroeconomic level. We argue that certain research design issues are likely to contribute to this apparent mismatch in findings and we suggest areas for future research to address it. The literature investigating unintended consequences of mandatory IFRS adoption is still in its infancy. However, extant empirical evidence and insights from non-IFRS settings suggest that mandatory IFRS adoption has the potential to materially affect contractual outcomes. We conclude that both the intended and the unintended consequences deserve further scrutiny to assess the costs and benefits of mandatory IFRS adoption, which may help provide a basis for evaluating the effectiveness of the IAS Regulation. We provide specific guidance for future research in this field.International accounting, IFRS adoption, economic consequences, contracting, regulation, review

Goodwill Impairment

In 2001, goodwill amortization in the US was eliminated in favor of an impairment-only approach, which, according to critics, gives managers vast discretion and opportunities for earnings management. Prior research suggests that discretionary asset write-offs are associated with economic factors and managers’ financial reporting objectives. Based on a systematic literature review, this study investigates for a comprehensive sample of US firms the determinants of goodwill write-off behavior. Regression analysis shows that write-off behavior is significantly explained by firms’ economic properties. Only in large, high-profile firms, incentives appear to be significant determinants. These findings suggest that the impairment-only approach does capture goodwill impairment at least to some extent

Consequences of Voluntary and Mandatory Fair Value Accounting: Evidence Surrounding IFRS Adoption in the EU Real Estate Industry

We examine the causes and consequences of European real estate firms' decisions to provide investment property fair values prior to the required disclosure of this information under International Financial Reporting Standards (IFRS). We find evidence that investor demand for fair value information-reflected in more dispersed ownership-and a firm's commitment to transparency increase the likelihood of providing fair values prior to their required provision under International Accounting Standard 40 - Investment Property. We also find that firms not providing these fair values face higher information asymmetry. However, we fail to find that the relatively higher information asymmetry was reduced following mandatory adoption of IFRS. Rather, we find that differences in information asymmetry largely remain. Taken together, this evidence suggests that common adoption of fair value accounting due to the mandatory adoption of IFRS does not necessarily level the informational playing field.Fair value, disclosure, IFRS, information asymmetry

The Effect of Seesaw Technology on Parent Engagement at Private Montessori Schools

The researchers looked at how using Seesaw technology, in a six-week parent education intervention, would affect parent engagement with their children in learning at home as well as parent understanding of Montessori principles. The research participants were 31 parents and 2 teachers at two private, urban Montessori schools. Data was collected through pre and postintervention questionnaires, teacher logs of parent questions, and Seesaw usage data. Through the intervention, we saw parent knowledge of Montessori principles, parent engagement, parent efficacy, and parent confidence in Montessori education beyond preschool increase. Parents also enjoyed interacting with each other as a community of parents, building a school community. The research supports Seesaw as an effective tool for parent education in today’s digital world. Technology is something that is familiar to today’s parent and can be utilized more specifically and intentionally by schools to connect parents to student learning activities, to their community, and to encourage their own growth as parents. This growth was demonstrated by a shift in parents’ focus from the external (child’s behavior) to the internal (adult’s role in preparing the environment) consistent with Montessori’s prepared adul

Machine Learning und empirische Rechnungslegungsforschung: Einige Erkenntnisse und offene Fragen

Im Zuge der digitalen Transformation von Wirtschaft und Gesellschaft ergeben sich zunehmend Anwendungsfelder für Ansätze des maschinellen Lernens nicht nur in der Rechnungslegungspraxis, sondern auch in der betriebswirtschaftlichen Forschung auf diesem Gebiet. Der nachfolgende Beitrag diskutiert selektiv einige Einsatzgebiete von Machine-Learning-Ansätzen in der Unternehmensberichterstattung, der Abschlussprüfung sowie der Unternehmensanalyse und -bewertung. Zudem werden aktuelle und potenzielle Anwendungen in der empirischen Forschung aufgezeigt sowie limitierende Faktoren diskutiert.The digital transformation of economy and society increasingly fosters machine learning applications in a wide range of areas. Accounting practice and empirical accounting research are no exception. This article selectively discusses machine learning approaches in corporate reporting, auditing, analysis, and valuation. In addition, current and potential applications in empirical research are shown, and limiting factors are discussed

The impact of accounting standards on pension investment decisions

This is the author accepted manuscript. The final version is available from the publisher via the DOI in this record.This study analyzes the ‘real’ effects of accounting standards in the context of defined benefit pension plans. Specifically, we examine the impact of IAS 19R, which increases expected pension-induced equity volatility by eliminating the so-called ‘corridor method’, a smoothing device for actuarial gains and losses. Supported by interview evidence, we show that IAS 19R leads firms to reconsider their pension investment decisions. Using matched samples of treatment and control firms, results from multivariate difference-in-differences tests indicate that firms affected by the adoption of IAS 19R significantly shift their pension assets from equities into bonds, relative to control firms. This effect is attenuated for firms with larger and better-funded pension plans. Supplementary analyses suggest that this shift in pension investment is mainly due to IAS 19R’s changes in the accounting for actuarial gains and losses (the ‘OCI method’). These results are robust to several sensitivity tests, although endogeneity concerns cannot be fully ruled out. Our study informs accounting standard setters and other stakeholders of potential shifts in firms’ real economic activities due to concerns about pension-induced equity volatility

Intended and unintended consequences of mandatory IFRS adoption

This paper discusses empirical evidence on the economic consequences of mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union (EU) and provides suggestions on how future research can add to our understanding of these effects. Based on the explicitly stated objectives of the EU‟s so-called „IAS Regulation‟, we distinguish between intended and unintended consequences of mandatory IFRS adoption. Empirical research on the intended consequences generally fails to document an increase in the comparability or transparency of financial statements. In contrast, there is rich and almost unanimous evidence of positive effects on capital markets and at the macroeconomic level. We argue that certain research design issues are likely to contribute to this apparent mismatch in findings and we suggest areas for future research to address it. The literature investigating unintended consequences of mandatory IFRS adoption is still in its infancy. However, extant empirical evidence and insights from non-IFRS settings suggest that mandatory IFRS adoption has the potential to materially affect contractual outcomes. We conclude that both the intended and the unintended consequences deserve further scrutiny to assess the costs and benefits of mandatory IFRS adoption, which may help provide a basis for evaluating the effectiveness of the IAS Regulation. We provide specific guidance for future research in this field