Economic consequences of SFAS 142 goodwill write-offs

Research output: Contribution to journalArticleScientificpeer-review


Research units

  • Oulu Business School
  • University of Oulu


This paper examines the economic consequences of goodwill write-offs under Statement of Financial Accounting Standards No. 142 (SFAS 142). Although write-off firms have performed poorly, it is evident that deteriorating economic performance explains only a small proportion of write-offs. After controlling for endogeneity of write-off choice, I fail to find evidence that investors and analysts fixate on SFAS 142 goodwill write-offs. I also provide evidence that write-off firms pay higher audit fees, suggesting that auditors charge higher fees in response to extra audit effort. These results are consistent with the principles of market efficiency, analyst-forecast rationality and efficient audit pricing.


Original languageEnglish
Pages (from-to)211-235
Number of pages25
Issue number1
Publication statusPublished - Mar 2014
MoE publication typeA1 Journal article-refereed

    Research areas

  • Audit fees, Conditional conservatism, Fair-value accounting, Market efficiency, Propensity score matching

ID: 9630224