A Risk Assessment of Intangible Asset Valuation: The Post-Hoc Association between Goodwill Impairments and Risk Hazards in Mergers and Acquisitions

Authors

  • Peter L. Lohrey Montclair State University
  • James A. DiGabriele Montclair State University
  • Joseph Nicholson Montclair State University

Keywords:

Management, Asset Valuation, Mergers, Acquisitions

Abstract

We tested whether the change from SFAS 141 to SFAS 141r/ASC 805 had any effect on restatements due to goodwill impairment. Our findings suggest that the implementation of SFAS 141r increased the likelihood of a financial restatement by 2.5 times. Board of Director and Audit Committee involvement in the goodwill impairment decision reduced the likelihood of a restatement occurring. Service industry companies were 3.2 times more likely to restate their assets due to goodwill impairment. Companies who were audited by a Big4 firm reduced the odds of restatement by 47%.

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Published

2017-03-01

How to Cite

Lohrey, P. L., DiGabriele, J. A., & Nicholson, J. (2017). A Risk Assessment of Intangible Asset Valuation: The Post-Hoc Association between Goodwill Impairments and Risk Hazards in Mergers and Acquisitions. American Journal of Management, 17(1). Retrieved from https://articlegateway.com/index.php/AJM/article/view/1763

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Section

Articles