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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.

Accounting: study & revision guides --- Budgeting & financial management --- Goodwill (Commerce) --- Write-offs. --- Accounting --- Charge-offs --- Write-downs --- Writedowns --- Writeoffs --- Good-will (in business, etc.) --- Business --- Intangible property --- Clean surplus (Accounting) --- Bilanzpolitik --- Empirical --- Firmenwert --- Generally Accepted Accounting Principles --- Geschäftswert --- Goodwill --- Impairment --- Investigation --- Offs --- Sellhorn --- SFAS --- under --- USA --- US-GAAP --- Wertberichtigung --- Write