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This study aims to examine the impact of the 2008-2009 global financial crisis (GFC) on Australian firms' compliance with IFRS 36/AASB 136 for goodwill impairment testing. It also examines the factors associated with the cross-sectional variations in the compliance levels.

Based on a survey of disclosure notes in companies' annual reports, firm-level compliance scores were developed and further analysed applying quantitative statistical methods.

The findings suggest that firms' compliance has increased during the GFC compared to the PCP. There was no significant intra-period change in the compliance levels during the PCP. Firms belonging to goodwill intensive industries show greater compliance levels than firms in other industries. Audit quality is also a significant determinant of firms' compliance with IFRS for goodwill impairment testing. Goodwill intensity is a significant determinant of firms' compliance level during the GFC but not during the PCP. Firm size is associated with the compliance levels when the industry effects are not controlled for. When the industry effects are controlled for, the effect of size on firms' compliance levels disappears. Profitability is also associated with firms' compliance with IFRS for goodwill impairment testing. However, firms' leverage ratio is not significantly associated with compliance levels.

This is the first known study to examine the issue of compliance with IFRS for goodwill impairment testing in the context of the GFC and the PCP.

The purpose of this paper is to examine the assessment process for goodwill impairment. The paper evaluates compliance with goodwill impairment tests required under the Statement of Financial Accounting Standard 142 and International Accounting Standard 36, highlighting challenges encountered in complying with these standards. The paper explores areas in which improvements might be made in both goodwill‐impairment compliance and disclosures and identifies areas for future research.

The method is exploratory in nature. A combination of data collection, analysis, and interpretation is employed.

The research highlights a number of features of the impairment testing and measurement process that make implementation a challenge. Triggering events are many and vary greatly in significance and severity. Different valuation models are used and there is little conformity in the selection of discount rates. In some cases, though not consistently, control premiums are used to enhance the indicated market values of reporting units. Some firms may even deny the need for an indicated impairment charge. In all of the cases examined, the paper notes the need for judgmental estimates and the possibility that these estimates might be managed to alter or avoid goodwill impairments, limiting the comparability of results across firms.

The findings will provide feedback to standard setters and practicing professionals in an effort to improve practice. For investors and creditors, the results should prove helpful in evaluating the likelihood of goodwill impairments. For researchers, the paper identifies certain questions that may provide fruitful avenues for further investigation.

The findings are based on an examination of a large sample of current filings of public companies that has yet to be performed. The observed richness and variation in the practices employed and disclosures provided both broaden and deepen our understanding of goodwill impairment accounting.

This research was founded on the premise that more can be done to help improve safety in the global construction industry. Worker fatigue-impairment may be an underlying cause or major contributor to accidents. Fatigue-impairment is believed to be pervasive in construction, and research has shown it can be as concerning as alcohol-impairment. When fatigue-impairment is acknowledged as existing, there is poor understanding of its severity or how it contributes to performance and accidents. The purpose of this research was to attempt to measure fatigue-impairment in real time.

This research expanded on actual measurements of fatigue-related impairment from workers on a large construction project displaying significant fatigue-related impairment. The research identified and tested possible techniques for real-time measurement solutions to assist with this safety-related issue. 100 participants had their sleep/wake cycles monitored for a month with an actigraph to derive their on-going mental effectiveness levels by the minute. The same participants took cognitive tests over the month to compare mental performance results to the modelled mental effectiveness levels.

Performance results from cognitive tests were compared with modelled mental effectiveness from actigraph-monitored sleep of 100 participants for a month each and showed significant correlation for all cognitive tests used.

This research showed that real-time surrogate measurements for fatigue-impairment in the workplace exist to assist organizations manage an important workplace hazard.

Derived from operational settings, this research developed predictive models based on simple, quick and inexpensive cognitive tests as screening techniques for workplace impairment and confirmed the need for and found a solution for fatigue monitoring in the workplace.

When the FASB adopted an impairment test approach in 2001, rather than amortisation, the accounting for goodwill arising from an acquisition took a step in a new direction. The IASB, seeking international convergence and global harmonisation, also implemented this change when it issued IFRS 3 in 2004. Moving away from amortisation towards an impairment test involves a radical change. The research on which this paper is based was undertaken to examine these two very different accounting practices for the treatment of goodwill and to assess the possible impact that a transition from the one to the other may have on financial reporting.

The purpose of this paper is to catalogue the practice of goodwill impairment testing in Australia and to provide evidence of the extent of compliance with respect to the disclosure requirements of international financial reporting standards (IFRS).

The research question is addressed using an empirical archival approach with an emphasis on note‐form disclosures in the audited financial accounts of 200 goodwill‐intensive firms listed on the Australian Securities Exchange at 2006. The disclosures regarding impairment testing methodologies along with key input variables for the estimation of recoverable amounts are catalogued and an assessment is made of the extent to which such disclosures confirm with the requirement of AASB136.

The results provide evidence of systematic non‐compliance with the disclosure requirements of the IFRS goodwill impairment testing regime on the part of large listed Australian firms. Insight is gained into the level of difficulty experienced by large, sophisticated and well‐resourced organisations in confronting the challenges associated with changing their financial reporting practices at the time of mandatory adoption of IFRS in Australia.

While previous goodwill impairment testing studies have examined discount rate selection by reporting entities as one input variable solely under the value in use method, this paper provides empirical insights into all aspects of goodwill impairment testing for value in use, fair value and mixed method firms, cataloguing growth rate and forecast period disclosures. The paper provides a baseline study of compliance quality at the inception of IFRS in Australia.

The purpose of this paper is to examine the effect of audit quality on firms’ compliance with IFRS for goodwill impairment testing and disclosure. Differences in the compliance among the clients of Big-4 auditors and between the clients of Big-4 and non-Big-4 auditors are examined. This study also examines the effect of audit committee (AC) members’ accounting and finance backgrounds on firms’ compliance with IFRS for goodwill impairment testing and disclosure.

Different univariate tests, multivariate regressions and fixed effect panel regressions have been used to examine the hypotheses. The sample includes 911 firm-year observations for the period of 2006-2009.

A statistically significant difference in compliance levels has been found between the clients of Big-4 and non-Big-4 auditors. The compliance levels of the clients of Big-4 auditors have also been found to be significantly different. The findings also suggest that AC members’ accounting and finance backgrounds are positively associated with firms’ compliance with IFRS for goodwill impairment testing and disclosure.

The single country context and the single standard context limit the generalizability of the findings.

The findings of this study have important implications for researches in accounting, finance and corporate governance that usually consider Big-4 auditors vs non-Big-4 auditors as a proxy for audit quality. The results also reinforce the importance of developing institutional mechanisms such as high-quality auditing or corporate governance (AC members’ expertise) to encourage firms’ compliance with IFRS.

Firms’ compliance with IFRS for goodwill impairment testing is not essentially the same for the clients of all Big-4 auditors in Australia, suggesting that the quality of services provided by Big-4 auditors significantly differ from one another in enforcing their clients to compliance with IFRS. The lax enforcement on the part of auditors and the regulatory inaction in this regard may point to teething difficulties and systematic deficiencies in the move towards the impairment regime and fair value accounting. The findings also bear an important message for the move towards the harmonization of accounting practices.

The paper aims to analyze the reasons for the unremarkable increase in value relevance of new impairment testing of goodwill following the introduction of new accounting standards SFAS 141 and 142.

After surveying main research about market reactions to announcements of goodwill write‐off before and after the introduction of the new SFAS the paper shows why the two‐step procedure of impairment testing risks undermining the very economic substance of the test.

The analysis shows the inadequacy of the impairment test to measure the destruction of wealth experienced by acquiring firms’ shareholders and to supply value‐relevant information owing to the lack of disclosure of information after the first stage of the test. It also shows the consequences of management's discretionary power in setting forth projections.

The paper lays the groundwork for interpreting the empirical evidence on the limited information content of goodwill write‐offs.

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 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 provide evidence relating to the potential for and extent of opportunistic exercise of discretion by large Australian and New Zealand reporting entities undertaking goodwill impairment testing pursuant to the International Financial Reporting Standards (IFRS) framework.

The research question is addressed using an empirical archival approach. Independent risk‐adjusted estimates of firm discount rates are calculated for a sample of 124 Australian and New Zealand listed firms, and an analysis of variances between these rates and those adopted by sample firms undertaken for the purposes of ascertaining evidence of potential opportunism in discount rate selection.

Evidence consistent with opportunism in the selection of discount rates is reported. The results suggest the existence of a bias among Australian and New Zealand firms towards the application of lower than expected discount rates. This is interpreted as evidence of the opportunistic exercise of discretion to avoid unwanted impairment losses.

The results raise doubts as to the efficacy of the IFRS impairment testing process in practice and suggest the need for greater rigour and vigilance on the part of auditors and regulators overseeing entities reporting pursuant to IFRS.

This is one of a limited number of empirical studies into the effect of the IFRS goodwill impairment testing regime in practice in Australia and New Zealand. The paper provides new empirical insights into the operation of the IFRS regime, in particular, the key dimension of discount rate selection by reporting entities.