Nowadays,the wave of mergers and acquisitions in the capital market is still surging.High evaluation does bring high performance,and the huge impairment of goodwill has become a key factor for the frequent Black Swan ...Nowadays,the wave of mergers and acquisitions in the capital market is still surging.High evaluation does bring high performance,and the huge impairment of goodwill has become a key factor for the frequent Black Swan events of listed companies.Starting from the essence of goodwill,using Chinese A-share listed companies from 2007 to 2019 as samples and based on the market data,distribution analysis and performance impact,this paper argues that problems of goodwill impairment in China are incomplete accounting standards,inexhaustive impairment implementation and incomprehensive market supervision,thus giving reasonable suggestions.Proper follow-up measurement of goodwill is conducive to improving accounting information quality and adapting to capital market demands,which is of great significance to the revision of international standards.展开更多
This study investigates the effect of flexible tax enforcement on firms’excess goodwill using unique manually collected data on taxpaying credit rating in China from 2014 to 2021.We document that A-rated taxpayer fir...This study investigates the effect of flexible tax enforcement on firms’excess goodwill using unique manually collected data on taxpaying credit rating in China from 2014 to 2021.We document that A-rated taxpayer firms have less excess goodwill;A-rated firms reduce excess goodwill by 0.005 vis-a-vis non-Arated firms,which accounts for 100%of the mean value of excess goodwill.This finding holds after multiple robustness tests and an endogeneity analysis.Moreover,this negative effect is more pronounced in firms with low information transparency,that are non-state-owned and that are located in regions with low tax enforcement intensity.The channel test results suggest that taxpaying credit rating system as flexible tax enforcement reduces firms’excess goodwill through a reputation-based effect and not a governance-based effect.This study reveals that the taxpaying credit rating system in China as flexible tax enforcement can bring halo effect to A rating firms,thereby limiting irrational M&As and breaking goodwill bubble.展开更多
The rapidly increasing volume of goodwill assets in the capital market generates potential risks due to the possibility of an untimely recognition of goodwill impairment.In this paper,we investigate the financial cons...The rapidly increasing volume of goodwill assets in the capital market generates potential risks due to the possibility of an untimely recognition of goodwill impairment.In this paper,we investigate the financial consequences of goodwill impairment avoidance based on firms’future performance and stock prices.Using Chinese A-share listed firms with goodwill balances,we find that avoiding goodwill impairments negatively affects a firm’s performance growth and increases its risk of a future stock price crash.These adverse effects continue for the three years following the goodwill impairment avoidance.Our results indicate that goodwill impairment avoidance has detrimental impacts on a firm’s future performance and stock price and that these impacts are persistent.Our conclusions are helpful for regulators on how to prevent the risks hidden in goodwill impairment recognition and maintain the stable development of the financial market.展开更多
There has been a steady growth of goodwill impairments in the Chinese stock market since the adoption of the impairment approach in accounting.The influence of goodwill impairments on a firm’s financial position and ...There has been a steady growth of goodwill impairments in the Chinese stock market since the adoption of the impairment approach in accounting.The influence of goodwill impairments on a firm’s financial position and profitability give reason to doubt its current and future performance.We examine whether auditors,as a crucial external monitor,identify the information risks of goodwill impairments and express their concerns about financial reporting quality in their audit opinions.Using a sample of firms listed on China’s Ashare market from 2007 to 2017,we test the association between goodwill impairments and the type of audit opinion received in the same financial period.Our findings are as follows.First,the probability of receiving a modified opinion increases with the amount of goodwill impairments.Second,the positive association between goodwill impairments and modified audit opinions is driven primarily by earnings management risks.Third,this positive association is more salient when auditors are industry experts and there is no auditor–client mismatch.Fourth,auditors are more sensitive to the amount of goodwill impairments than to their mere existence.Overall,we document that auditors perceive goodwill impairments as a signal of information risks and communicate their concerns to investors to avoid litigation.展开更多
文摘Nowadays,the wave of mergers and acquisitions in the capital market is still surging.High evaluation does bring high performance,and the huge impairment of goodwill has become a key factor for the frequent Black Swan events of listed companies.Starting from the essence of goodwill,using Chinese A-share listed companies from 2007 to 2019 as samples and based on the market data,distribution analysis and performance impact,this paper argues that problems of goodwill impairment in China are incomplete accounting standards,inexhaustive impairment implementation and incomprehensive market supervision,thus giving reasonable suggestions.Proper follow-up measurement of goodwill is conducive to improving accounting information quality and adapting to capital market demands,which is of great significance to the revision of international standards.
基金funded by a grant from the Natural Science Foundation of China(No.71762014)Soft Science Foundation in Gansu(No.23JRZA374).
文摘This study investigates the effect of flexible tax enforcement on firms’excess goodwill using unique manually collected data on taxpaying credit rating in China from 2014 to 2021.We document that A-rated taxpayer firms have less excess goodwill;A-rated firms reduce excess goodwill by 0.005 vis-a-vis non-Arated firms,which accounts for 100%of the mean value of excess goodwill.This finding holds after multiple robustness tests and an endogeneity analysis.Moreover,this negative effect is more pronounced in firms with low information transparency,that are non-state-owned and that are located in regions with low tax enforcement intensity.The channel test results suggest that taxpaying credit rating system as flexible tax enforcement reduces firms’excess goodwill through a reputation-based effect and not a governance-based effect.This study reveals that the taxpaying credit rating system in China as flexible tax enforcement can bring halo effect to A rating firms,thereby limiting irrational M&As and breaking goodwill bubble.
基金supported by the National Natural Science Foundation of China,china(Project No.71672204)
文摘The rapidly increasing volume of goodwill assets in the capital market generates potential risks due to the possibility of an untimely recognition of goodwill impairment.In this paper,we investigate the financial consequences of goodwill impairment avoidance based on firms’future performance and stock prices.Using Chinese A-share listed firms with goodwill balances,we find that avoiding goodwill impairments negatively affects a firm’s performance growth and increases its risk of a future stock price crash.These adverse effects continue for the three years following the goodwill impairment avoidance.Our results indicate that goodwill impairment avoidance has detrimental impacts on a firm’s future performance and stock price and that these impacts are persistent.Our conclusions are helpful for regulators on how to prevent the risks hidden in goodwill impairment recognition and maintain the stable development of the financial market.
文摘There has been a steady growth of goodwill impairments in the Chinese stock market since the adoption of the impairment approach in accounting.The influence of goodwill impairments on a firm’s financial position and profitability give reason to doubt its current and future performance.We examine whether auditors,as a crucial external monitor,identify the information risks of goodwill impairments and express their concerns about financial reporting quality in their audit opinions.Using a sample of firms listed on China’s Ashare market from 2007 to 2017,we test the association between goodwill impairments and the type of audit opinion received in the same financial period.Our findings are as follows.First,the probability of receiving a modified opinion increases with the amount of goodwill impairments.Second,the positive association between goodwill impairments and modified audit opinions is driven primarily by earnings management risks.Third,this positive association is more salient when auditors are industry experts and there is no auditor–client mismatch.Fourth,auditors are more sensitive to the amount of goodwill impairments than to their mere existence.Overall,we document that auditors perceive goodwill impairments as a signal of information risks and communicate their concerns to investors to avoid litigation.
