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- Title
Is older goodwill value relevant?
- Authors
Bugeja, Martin; Gallery, Natalie
- Abstract
Although previous research has generally found that goodwill reported in firms' financial reports is relevant to equity valuation, no known studies have directly examined whether the value-relevance of purchased goodwill holds as it ages. We examine this issue in the Australian context to determine whether the market attaches different values to the components of Australian firms' goodwill when it is disaggregated into different 'ages'. Our results suggest that recently acquired goodwill has information content whereas 'older' goodwill does not. Our findings have implications for goodwill accounting practice and recent changes to goodwill accounting standards.
- Subjects
AUSTRALIA; ACCOUNTING standards; GOODWILL (Commerce); FINANCIAL statements; VALUATION; EQUITY (Law); ACCOUNTING
- Publication
Accounting & Finance, 2006, Vol 46, Issue 4, p519
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2006.00181.x