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Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue

This study investigated whether the difference in the predictive value of goodwill (GW) impairment for future cash flows is caused by the discrepancies between recognition and GW amortization under the Generally Accepted Accounting Principles in Japan (J-GAAP) and the International Financial Reporti...

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Main Author: Shu, Inoue
Format: Article
Language:English
Published: Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam 2024
Subjects:
Accounts and books. General works
Online Access:https://ir.uitm.edu.my/id/eprint/103376/2/103376.pdf
https://ir.uitm.edu.my/id/eprint/103376/
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spelling my.uitm.ir.1033762024-09-30T04:38:25Z https://ir.uitm.edu.my/id/eprint/103376/ Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue mar Shu, Inoue Accounts and books. General works This study investigated whether the difference in the predictive value of goodwill (GW) impairment for future cash flows is caused by the discrepancies between recognition and GW amortization under the Generally Accepted Accounting Principles in Japan (J-GAAP) and the International Financial Reporting Standards (IFRS). Results showed that GW impairments reported under IFRS, which require an annual impairment test with a GW non-amortization, were more negatively related to changes in future operating cash flows than those under J-GAAP, which required a two-step impairment test with a GW amortization. Subsequent evidence suggested that the GW impairment of firms that switched their accounting standard from J-GAAP to IFRS was also negatively associated with changes in future operating cash flows. This result implies that GW impairments under IFRS are more informative and timelier than those under J-GAAP, even if shifting to IFRS is voluntary, which examines GW impairments over a long period and in a single country, allowing an examination of ignoring the difference of institutional settings across countries. Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam 2024-08 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/103376/2/103376.pdf Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue. (2024) Management & Accounting Review (MAR) <https://ir.uitm.edu.my/view/publication/Management_=26_Accounting_Review_=28MAR=29/>, 23 (2): 7. pp. 143-168. ISSN 2550-1895
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Accounts and books. General works
spellingShingle Accounts and books. General works
Shu, Inoue
Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
description This study investigated whether the difference in the predictive value of goodwill (GW) impairment for future cash flows is caused by the discrepancies between recognition and GW amortization under the Generally Accepted Accounting Principles in Japan (J-GAAP) and the International Financial Reporting Standards (IFRS). Results showed that GW impairments reported under IFRS, which require an annual impairment test with a GW non-amortization, were more negatively related to changes in future operating cash flows than those under J-GAAP, which required a two-step impairment test with a GW amortization. Subsequent evidence suggested that the GW impairment of firms that switched their accounting standard from J-GAAP to IFRS was also negatively associated with changes in future operating cash flows. This result implies that GW impairments under IFRS are more informative and timelier than those under J-GAAP, even if shifting to IFRS is voluntary, which examines GW impairments over a long period and in a single country, allowing an examination of ignoring the difference of institutional settings across countries.
format Article
author Shu, Inoue
author_facet Shu, Inoue
author_sort Shu, Inoue
title Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
title_short Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
title_full Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
title_fullStr Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
title_full_unstemmed Goodwill impairment and future cash flows under Japanese GAAP and IFRS / Shu Inoue
title_sort goodwill impairment and future cash flows under japanese gaap and ifrs / shu inoue
publisher Accounting Research Institute (ARI), Universiti Teknologi MARA, Shah Alam
publishDate 2024
url https://ir.uitm.edu.my/id/eprint/103376/2/103376.pdf
https://ir.uitm.edu.my/id/eprint/103376/
_version_ 1811598358788177920
score 13.211869

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