<abstract xmlns="http://www.w3.org/1999/xhtml">

<sec><h3>Objective</h3>
<p>This paper examines the extent to which different corporate governance mechanisms affect the recognition and measurement of goodwill impairment, considering that these decisions are affected by a complex set of factors such as variables associated with corporate governance, economic/financial variables, and the market.</p>
</sec>
<sec><h3>Methodology</h3>
<p>We used data from 110 companies, both Spanish (75) and Portuguese (35), with listed securities, in the period 2010–2016 (unbalanced panel), and the path analysis method to infer financial and non-financial data relationships.</p>
</sec>
<sec><h3>Findings</h3>
<p>The results support the hypothesis that attributes linked to management and internal and external control mechanisms, as well as economic/financial, market and location variables, are directly and indirectly associated with the recognition of goodwill impairment.</p>
</sec>
<sec><h3>Value Added</h3>
<p>This paper outlines a company behavioral profile where opportunity seems to prevail over timely recognition and measurement of goodwill impairment. Big bath practices appear to be well founded, as well as the alignment of this strategy with market signals.</p>
</sec>
<sec><h3>Recommendations</h3>
<p>To foster the adoption of accounting practices close to the interests of all stakeholders, regulators should be encouraged to incentivize corporate governance models that promote the periodic rotation of the chief executive officer/chairman, the independence of all members of the statutory audit board, and training in economic and financial areas.</p>
</sec>
</abstract>

Objective
This paper examines the extent to which different corporate governance mechanisms affect the recognition and measurement of goodwill impairment, considering that these decisions are affected by a complex set of factors such as variables associated with corporate governance, economic/financial variables, and the market.

Methodology
We used data from 110 companies, both Spanish (75) and Portuguese (35), with listed securities, in the period 2010–2016 (unbalanced panel), and the path analysis method to infer financial and non-financial data relationships.

Findings
The results support the hypothesis that attributes linked to management and internal and external control mechanisms, as well as economic/financial, market and location variables, are directly and indirectly associated with the recognition of goodwill impairment.

Value Added
This paper outlines a company behavioral profile where opportunity seems to prevail over timely recognition and measurement of goodwill impairment. Big bath practices appear to be well founded, as well as the alignment of this strategy with market signals.

Recommendations
To foster the adoption of accounting practices close to the interests of all stakeholders, regulators should be encouraged to incentivize corporate governance models that promote the periodic rotation of the chief executive officer/chairman, the independence of all members of the statutory audit board, and training in economic and financial areas.

A Path Analysis of Goodwill Impairment – Does Corporate Governance Matter?

Nova School of Business and Economics – Universidade Nova de Lisboa

Escola Superior de Gestão, Hotelaria e Turismo – Universidade do Algarve

Faculdade de Economia – Universidade do Algarve

Journal of Intercultural Management

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

{"article-title":"A Path Analysis of Goodwill Impairment \u2013 Does Corporate Governance Matter?"}

Objective
This paper examines the extent to which different corporate governance mechanisms affect the recognition and measurement of goodwill impairment,...

A Path Analysis of Goodwill Impairment – Does Corporate Governance Matter?

Published Online: May 11, 2024

Page range: 5 - 48

DOI: https://doi.org/10.2478/joim-2024-0001

Keywords
Corporate governance, goodwill impairment, path analysis

© 2024 Leonor Fernandes Ferreira et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

A Path Analysis of Goodwill Impairment – Does Corporate Governance Matter?

Published Online: May 11, 2024

Page range: 5 - 48

DOI: https://doi.org/10.2478/joim-2024-0001

KeywordsCorporate governance, goodwill impairment, path analysis

© 2024 Leonor Fernandes Ferreira et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

Keywords
Corporate governance, goodwill impairment, path analysis