The implications of IFRS on the underlying economic value of acquired goodwill

Kelly, Paul Daniel Neculce. (2009). The implications of IFRS on the underlying economic value of acquired goodwill Honours Thesis, School of Business, The University of Queensland.

       
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Author Kelly, Paul Daniel Neculce.
Thesis Title The implications of IFRS on the underlying economic value of acquired goodwill
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 2009
Thesis type Honours Thesis
Total pages 74
Language eng
Subjects 14 Economics
Formatted abstract The existing literature has been heavily critical of the Australian adoption of the International Financial Reporting Standard's (IFRS) goodwill accounting methodology. To a large extent, this literature has focused on the costs of IFRS goodwill accounting changes. However, the objective of this thesis will be to investigate whether IFRS actually improves the underlying economic measure of acquired goodwill, compared with pre-IFRS accounting standards. The proposed IFRS improvement is largely drawn from improvements to the initial and subsequent measurement requirements for goodwill. Two research hypotheses are developed to test the association between goodwill and the underlying economics. Earnings and assets are developed as constructs for the acquisition's underlying economics for the first two post-acquisition years. The research hypotheses are tested using an empirical study that measures the correlation between goodwill and the underlying economic constructs in the pre and post-IFRS periods. A novel ordinary least-squares (OLS) regression model is developed that directly tests for an association between goodwill and the underlying economic constructs. Results indicate that goodwill is associated with the underlying economics in the first post-acquisition year, but not the second. Mixed findings are found on tests examining the correlation and association of IFRS with the acquisition's underlying economics.

 
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Created: Sat, 06 Nov 2010, 11:21:51 EST by Ning Jing on behalf of The University of Queensland Library