TY  - JOUR
AB  - Purpose The purpose of this paper is to investigate the association between bargain purchase gains (BPGs) booked by the acquirer and smoothing of acquirers’ earning performance across time.Design/methodology/approach The authors use a sample of 122 bargain purchase acquisitions in non-financial industries from 2009 to 2012 and a pair-match control group of 122 goodwill acquisitions.Findings The authors find that BPGs, and in particular, the Level-3 fair value estimates of intangible assets acquired, have consistently been used to smooth earnings but that such smoothing activities are not associated with long-term market returns.Originality/value This study is the first one to investigate bargain purchase acquisitions in a broad range of non-financial industries and suggests that managers are using the valuation of intangibles to avoid unfavorable earnings even though these valuations are not credible to investors.
VL  - 28
IS  - 2
SN  - 1321-7348
DO  - 10.1108/ARA-04-2018-0091
UR  - https://doi.org/10.1108/ARA-04-2018-0091
AU  - Lilien Steven
AU  - Sarath Bharat
AU  - Yan Yan
PY  - 2019
Y1  - 2019/01/01
TI  - Fair value accounting, earnings management, and the case of bargain purchase gain
T2  - Asian Review of Accounting
PB  - Emerald Publishing Limited
SP  - 229
EP  - 253
Y2  - 2024/05/10
ER  -