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This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing literature by describing their differing impact over goodwill and impairment figures and testing the impact of goodwill on balances over stock prices.

First, using a database with all Spanish non-financial firms with positive goodwill on their balance sheets, the authors describe the impact of the regulatory change over goodwill and impairment figures. Second, focussing on listed firms only, the authors study the impact of financial reporting of goodwill and impairment on stock prices.

Average goodwill per company and the share of goodwill over total assets significantly reduced after 2016, but the results cannot be easily extrapolated to listed firms due to lack of data. When testing the impact of potentially inflated goodwill balances on prices, the authors find that investors kept overvaluing firms with inflated goodwill balances also with the amortisation method.

The lack of data for listed firms with goodwill in Spain makes it difficult to obtain statistically sound evidence, the results could be biased by the cultural traits of the country and related to the intensity of enforcement and monitoring.

This might suggest that the effects of the impairment method linger, so the authors conform to the interpretation that the systematic amortisation paired with a periodic impairment test may lead to accounting that better reflects the underlying economics of goodwill.

To the best of the authors' knowledge, there are no recent articles that analyse this new “turn-around” requiring again the systematic amortisation of goodwill.

This study empirically investigates the relationship between goodwill assets and capital structure (i.e. debt ratio) of firms and the moderating effect of financial market development on the relationship between goodwill assets and capital structure.

This research applied a quantitative method. The article collects large samples of listed firms from 23 developing and nine developed countries and applied the panel data techniques. This research used firm-level data from the DataStream database for both developed and developing countries. The study uses 4,912 firm-level data from 23 developing countries and 4,303 firm-level data from nine developed countries.

The findings reveal a significant positive relationship between goodwill assets and capital structure in developing countries, but goodwill assets have a significant negative relationship with capital structure in developed countries. Moreover, financial market development positively moderates the relationship between goodwill assets and the capital structure of firms in developing countries. The results inform firm managers that goodwill assets serve as additional collateral to secure debt financing. Moreover, policymakers should formulate a debt market policy that recognizes goodwill assets as additional collateral for the purpose of obtaining debt capital.

The study has several implications. First, goodwill assets are identified as a factor of capital structure in this study. Fixed assets have been identified as one of the drivers of capital structure in previous research, although goodwill assets are seldom included. Second, this article shows that along with demand-side determinants, supply-side determinants also play an important role in terms of the firms' choice about the capital structure. Therefore, firms should take both the demand-side and supply-side factors into consideration when sourcing for external financing (i.e. debt capital).

The study considered goodwill as a component of capital structure. The study analysis includes a large sample of enterprises, including 4,912 big firms from 23 developing countries and 4,303 large firms from nine industrialized or developed countries, which adds to the current capital structure information. Furthermore, a large sample size increases the results' robustness and generalizability.

This study aims to contribute to the debate on goodwill accounting by examining the information content of impairment losses recognized in half-yearly reports. Half-yearly reports provide a suitable context to examine the effectiveness of the impairment process. Due to IFRIC 10 requirements, indeed, managers may have incentives to avoid recognizing impairment losses at the interim reporting date.

The study adopts an archival approach. Based on the traditional Ohlson’s model (1995), it explores the information content of half-yearly impairment losses in the European context over the period 2007–2017.

Findings confirm the relevance of half-yearly reports and suggest that half-yearly impairment losses are significantly associated with stock prices. In particular, investors positively value companies that recognized goodwill impairment losses at the interim reporting date.

The study contributes to the academic debate on goodwill and the effectiveness of the impairment procedure. In particular, it provides empirical evidence on the recognition of goodwill write-offs when it is possible to avoid the impairment test in the absence of indications of impairment.

Findings of this study can support the current debate on accounting for goodwill also in the light of the recent proposals of the IASB on the need to improve the effectiveness of the impairment test.

This study provides original empirical evidence on the goodwill impairment test in half-yearly reports, extending previous research that typically examines this issue in annual reports.

This paper aims to examine the effects of managerial ability (MA) on the likelihood and the timeliness of goodwill impairment and explore whether the desirable effect of MA vary with the degree of agency problems.

The authors propose a unified framework to simultaneously examine the effects of MA on the likelihood and the timeliness of goodwill impairment by incorporating a market-based impairment indicator (denoted as BTM), MA and the interaction of BTM with MA to this study’s regression model to account for the likelihood of goodwill impairment. BTM addresses the timeliness of goodwill impairment.

This study finds that firms with higher MA have lower likelihood of goodwill impairment, and such firms are more likely to recognize goodwill impairment in a timely manner when the underlying value of goodwill is economically impaired. This desirable effect of MA is more pronounced in non-state-owned enterprise (SOEs) and firms without chief executive officer (CEO) duality.

Firms can reduce the losses arising from goodwill impairment by enhancing the ability of their management teams combined with improved corporate governance structure.

This paper provides novel insights on understanding the role of MA in not only reducing the likelihood but also enhancing the timeliness of goodwill impairment. The findings help advance the upper echelons theory by uncovering the heterogenous effects of executives with different levels of ability.

This study aims to investigate the impact of human resource investment in internal controls (hereinafter, IC personnel) on managers’ goodwill impairment decisions.

The authors use the ratio of IC personnel to the number of employees in the firm and the average work experience of IC personnel as quantitative and qualitative measures for IC personnel, respectively.

The authors find that the relationship between the likelihood of impairment and the expected impairment is not associated with the ratio of IC personnel. However, the average experience of IC personnel increases the likelihood that a company will record an impairment when there are market and financial indicators of impairment. The findings suggest that the effectiveness of IC is determined by practical proficiency rather than size. Furthermore, our analyses demonstrate that the greater the experience of the IC personnel in the accounting/finance or IT departments, the more likely the manager will record an expected impairment. Overall, our findings emphasize the importance of IC personnel expertise to enhance the effectiveness of IC for financial reporting.

Using unique data available only in Korea, to the best of the authors’ knowledge, this is the first study to show the effect of human resource investment in IC on goodwill impairment.

Tourism recovery after the pandemic has failed to take the path leading to sensitivity and humaneness at destination level. This chapter argues that to open this path, we need to confront the belief that tourists are self-centred, fun-driven and cheating individuals. This view on tourists and more generally human beings is central to the neoliberal understanding of consumers. It has moreover taken a strong grasp on the mind of economists, politicians, academics and the public at large.

To counteract this idea, I call upon Aristotle's discussion of friendship. In Nicomachean Ethics, Aristotle distinguishes between three forms of friendship: of utility, of pleasure, and of goodwill. Utility implies a relationship where people befriend each other in virtue of some good or service that they get or expect to get from each other. Friendships of utility, therefore, imply reciprocation. Friendships of pleasure can also be understood as a form of reciprocal altruism. However, friendships of goodwill are different because they are felt for others for their own sake and not in expectation of a favour in return. Friendships of goodwill include therefore others who may not be able to reciprocate, such as tourists staying only a short time at a destination. Looking through the lens of friendships of goodwill, one could argue that all tourists, including short-stay visitors, will be friendly and caring towards their hosts.

This chapter explores the soundness of friendships of goodwill in the light of more recent research on human nature. It also discusses its implications for our understanding of human beings, the relationship between hosts and guests, and ultimately the opportunity to steer tourism along a more sensitive, human and sustainable path.

This study aims to investigate the impact of the audit committee chair’s trust on the quality of interactions between the external auditor and the audit committee chair in Hong Kong.

The research uses a questionnaire survey to gather data from the audit committee chairs of the listed companies in Hong Kong, with a response rate of 19.2%. Partial least squares structural equation modelling is used in this study.

The results reveal that the audit committee chair’s trust in the external auditor’s competence, integrity and goodwill is an important determinant of the interaction quality. The findings also show that interaction quality during the pre-engagement stage is important to mediate the relationships between the three dimensions of trust and interaction quality during the audit performance stage.

This is the first study, to the best of the author’s knowledge, that examines the impact of the audit committee chair’s trust in the external auditor on the quality of their interactions. The findings provide insights for board of directors, auditors and policymakers to implement policies that enhance trust between them to improve audit quality.

This study aims to investigate the most effective approach for governments and enterprises to combat desertification by considering the governance cycle. The focus is on understanding how the government can incentivize enterprises to actively engage in desertification combat efforts.

Both the government and the enterprise are treated as rational entities, making strategic choices for joint participation in combating desertification. Recognizing the dynamic nature of the desertification combat area, differential game models are employed to identify the optimal mode for combating desertification.

The findings underscore the significant influence of the governance cycle duration on the selection of desertification combat modes for government and enterprise. A cooperative mode is best suited to a short governance cycle, while an ecological subsidy mode is optimal for a longer cycle. Enhancing governance technology and shortening the governance cycle are conducive to combating desertification. Reducing taxes alone may not be an effective control strategy; rather, the government can better motivate enterprises by adopting tax rate policies aligned with the chosen governance mode.

This research contributes by elucidating the impact mechanism of the government cycle’s length on the desertification combat process. The results may offer valuable insights for governments in formulating strategies to encourage corporate participation in combating desertification and provide theoretical support for selecting optimal desertification combat modes.

In 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also discuss the intervening developments in scholarly research, standard setting and practice over the past 20+ years to outline the future challenges for research into accounting for intangibles.

We conducted a literature review to identify past developments and link the findings to current accounting standard-setting developments to inform our view of the future.

Current intangibles accounting practices are conservative and unlikely to change. Accounting standard setters are more interested in how companies report and disclose the value of intangibles rather than changing how they are determined. Standard setters are also interested in accounting for new forms of digital assets and reporting economic, social, governance and sustainability issues and how these link to financial outcomes. The IFRS has released complementary sustainability accounting standards for disclosing value creation in response to the latter. Therefore, the topic of intangibles stretches beyond merely how intangibles create value but how they are also part of a firm’s overall risk and value creation profile.

There is much room academically, practically, and from a social perspective to influence the future of accounting for intangibles. Accounting standard setters and alternative standards, such as the Global Reporting Initiative (GRI) and European Union non-financial and sustainability reporting directives, are competing complementary initiatives.

Our results reveal a window of opportunity for accounting scholars to research and influence how intangibles and other non-financial and sustainability accounting will progress based on current developments.

Trade credit is an important business-to-business marketing tool for building firms’ competitive advantage. Many studies explore the determinants of trade credits from a trust-based view, but the role of political connections is largely overlooked, despite their potential influence in assessing firms’ trustworthiness in the context of emerging economies. This study aims to fill this gap by examining how political connections affect the capacity of emerging economy firms (EEFs) to grant and receive trade credit.

This study tests a conceptual model using secondary data collected from 1,149 Chinese privately owned listed manufacturing firms between 2008 and 2016.

This study finds that political connections reduce EEFs’ accounts receivable and payable; their philanthropic activities alleviate this negative effect for accounts payable, while patent applications reduce it for accounts receivable. These findings suggest the effect of political connections can spillover to EEFs’ relationship with their up- and down-stream partners.

This study has implications EEF managers, particularly in pointing to the detrimental effect of political connections on relationships with buyers and suppliers, and highlights the need to adopt suitable approaches to offset this effect.

This study sheds new light on the negative effect of political connections on EEFs’ capacity to grant and receive trade credit in their exchanges with up-stream and down-stream partners. It enriches the trust-based view of trade credit by revealing the significant influence of EEFs’ political connections, while also advancing a contingency view by testing the moderating role of corporate philanthropic activities and patent applications.