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Goodwill Impairment and Managerial Ability

경영자능력과 영업권손상차손 인식

  • Oh, Hyun-Taek (Division of Business Administration, Cheongju University)
  • Received : 2018.08.30
  • Accepted : 2018.11.20
  • Published : 2018.11.28

Abstract

This study examines the effect of managerial ability on managers' opportunistic reporting discretion in recognizing the goodwill impairment losses after the adoption of K-IFRS. Cross-sectional regression results show that goodwill impairment losses are not recognized timely at the time of the goodwill impairment symptom, but rather managers make bad use of goodwill impairment losses as tools of income smoothing and big-bath. Managerial ability is not directly related to the recognition of goodwill impairment losses, but firms with more able managers recognize timely goodwill impairment losses when the symptom of goodwill impairment exists, and they use less income smoothing when the firms' expected pre-impairment earnings are abnormally high. This study is the first research to consider the relationship between managerial ability and manager' earnings management in goodwill impairment accounting.

Keywords

Managerial ability;Goodwill impairment;Income smoothing;Big-bath;K-IFRS

Table 1. Descriptive Statistics

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Table 2. Correlations among variables

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Table 3. Effect of managerial ability on association between goodwill impairment losses and impairment symptom (Dependent variable = GWIL)

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Table 4. Effect of managerial ability on association between goodwill impairment losses and managers’ reporting opportunism (Dependent variable = GWIL)

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Acknowledgement

Supported by : Cheongju University

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