Value relevance of goodwill: association between change in goodwill and market value

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en
dc.contributor.author Anjala, Sami
dc.date.accessioned 2016-11-01T11:20:32Z
dc.date.available 2016-11-01T11:20:32Z
dc.date.issued 2016
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/23096
dc.description.abstract The relevance of goodwill has become an increasingly important topic for accounting since FASB and IASB have both taken stance toward fair value accounting. There are many studies about market reactions and abnormal profits in acquisitions and also about the association between goodwill impairments and the market value. However, the findings of previous studies are somewhat inconsistent. This thesis examines the association between new purchased goodwill and the market value and also the association between goodwill write-offs and the market value. Also the impact that goodwill write-offs have on quality and relevance of the balance sheet is studied. Analysis is done through ordinary linear least squares regression. Goodwill balance increases through acquisition as a part of the acquisition price is allocated to the goodwill. Goodwill balance can be later impaired if its fair value is lower than its balance value. This goodwill write-off decreases the balance value. Findings show that neither purchased goodwill nor goodwill write-offs are fully associated with the market value. Purchased goodwill has significant positive impact on the market value. On the other hand, goodwill write-offs have significant negative impact on the market value. There is also evidence that after a goodwill write-off is done the balance sheet better represents its fair value. Thus, quality and relevance of the balance sheet improves for investors. en
dc.format.extent 59
dc.language.iso en en
dc.title Value relevance of goodwill: association between change in goodwill and market value en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Laskentatoimen laitos fi
dc.contributor.department Department of Accounting en
dc.subject.keyword goodwill
dc.subject.keyword impairment
dc.subject.keyword goodwill write-off
dc.subject.keyword acquisitions
dc.subject.keyword purchased goodwill
dc.subject.keyword acquired goodwill
dc.subject.keyword M&A
dc.subject.keyword value relevance
dc.subject.keyword SFAS 142
dc.subject.keyword SFAS 141
dc.subject.keyword regression
dc.subject.keyword OLS
dc.identifier.urn URN:NBN:fi:aalto-201801181094
dc.type.dcmitype text en
dc.programme.major Laskentatoimi fi
dc.programme.major Accounting en
dc.type.ontasot Pro gradu tutkielma fi
dc.type.ontasot Master's thesis en
dc.subject.helecon laskentatoimi
dc.subject.helecon liikearvo
dc.subject.helecon hankinnat
dc.ethesisid 14736
dc.date.dateaccepted 2016-09-06
dc.location P1 I


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