On The IFRS Discussion Paper Business Combinations: Disclosures, Goodwill and Impairment
Resumo
In 2020, the IFRS Foundation released the document Discussion Paper DP/2020/1: Business Combinations—Disclosures, Goodwill and Impairment (hereafter DP), according to the Post-Implementation Review of IFRS 3. The objective of the paper is to analyze, criticize and make propositions from the previous literature on the IASB's proposals for changes to goodwill accounting. For that, a working group of nine Brazilian academics built on a comment letter in response to the DP. Unlike a traditional article in the accounting area, the investigation of this research was based on the use of previous literature to observe the proposals for changes of the DP. This paper also provides reviews of prior research, assessments, discussions, suggestions for definitions and principles, and suggestions for further research related to disclosures about acquisitions, the effectiveness of the impairment test, the amortization of goodwill, the simplification of the impairment test, the separation of intangibles from goodwill, and the converging practices with the US GAAPs. The results indicated: i) the disclosure about acquisitions should focus on the monitoring of the success or failure of the acquisition; ii) the impairment standard does not present technical problems of effectiveness; iii) the acquired goodwill should be amortized over the time in which the manager expects to recover that investment; iv) an impairment test should be run when an adverse event happens and not annually; v) intangibles should continue to be recognized separately from goodwill; vi) and the change to the amortization model will probably converge with the US GAAPs. Moreover, from the point of view of previous scientific knowledge, it is possible to observe that some problems raised by the literature are considered in the problems pointed out by the standard-setter in the DP; the management of goodwill impairment results is the main one, widely reported in the literature in several aspects, such as timeliness, relevance and manager behavior. Finally, the results provide insights that can contribute to the IASB’s standard-setting process and to the literature on goodwill reporting.
Referências
ANDRÉ, P.; DIONYSIO, D.; TSALAVOUTAS, I. Mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets: Value relevance and impact on analysts’ forecasts. Applied Economics, v. 50, n. 7, p. 707–725, 2018.
BAKER, C. R.; WEARING, R. T. Impairment tests for goodwill instead of amortisation: The potential impact on British companies. Colchester, UK: Dept. of Accounting, Finance and Management, University of Essex, 2001.
BASU, S. The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, v. 24, n. 1, p. 3–37, 1997.
BEATTY, A.; WEBER, J. Accounting discretion in fair value estimates: An examination of SFAS 142 goodwill impairments. Journal of Accounting Research, v. 44, n. 2, p. 257–288, 2006.
BENS, D. A.; HELTZER, W.; SEGAL, B. The information content of goodwill impairments and SFAS 142. Journal of Accounting, Auditing & Finance, v. 26, n. 3, p. 527–555, 2011.
BETANCOURT, L.; IRVING, J. H. The Challenge of Accounting for Goodwill Impact of a Possible Return to Amortization. CPA Journal Content, New York, NY. 2019. https://www.cpajournal.com/2019/11/27/the-challenge-of-accounting-for-goodwill/.
BROWN, P.; PREIATO, J.; TARCA, A. Measuring country differences in enforcement of accounting standards: An audit and enforcement proxy. Journal of Business Finance & Accounting, v. 41, n. 1/2, p. 1–52, 2014.
CAPPELLESSO, G.; ROCHA, L. C. N.; DANTAS, J. A. Value relevance da perda por redução ao valor recuperável do goodwill: Evidências das empresas listadas na Bm&fbovespa. Revista Contabilidade Vista & Revista, v. 2, n. 93, p. 102–120, 2018.
CAPPELLESSO, G.; RODRIGUES, J. M.; PRIETO, M. de F. Redução ao valor recuperável do goodwill: Evidências do gerenciamento de resultados em sua determinação. Advances in Scientific and Applied Accounting, v. 10, n. 3, p. 286–303, 2017.
CARLIN, T. M.; FINCH, N. Discount rates in disarray: Evidence on flawed goodwill impairment testing. Australian Accounting Review, v. 19, n. 4, p. 326–336, 2009.
CARLIN, T. M., FINCH, N. Evidence on IFRS goodwill impairment testing by Australian and New Zealand firms. Managerial Finance, v. 36, n. 9, p. 785–798, 2010.
CARLIN, T. M.; FINCH, N. Goodwill impairment testing under IFRS: A false impossible shore? Pacific Accounting Review, v. 23, n. 3, p. 368–392, 2011.
CARVALHO, C.; RODRIGUES, A. M.; FERREIRA, C. The recognition of goodwill and other intangible assets in business combinations—The Portuguese case. Australian Accounting Review, v. 26, n. 1, p. 4–20, 2016.
CHAMBERS, D. J.; JENNINGS, R.; THOMPSON, R. B. Evidence on the usefulness of capitalizing and amortizing research and development costs. Review of Accounting Studies, v. 4, p. 169–195, 1999.
CHAN, L. K. C.; LAKONISHOK, J.; SOUGIANNIS, T. The stock market valuation of research and development expenditures. Journal of Finance, v. 51, n. 6, p. 2431–2456, 2001.
CHRISTENSEN, H. B.; HAIL, L.; LEUZ, C. Mandatory IFRS reporting and changes in enforcement. Journal of Accounting and Economics, v. 56, n. 3, p. 147–177, 2013.
FINANCIAL REPORTING COUNCIL. FRC ARP Staff Research Report: Investor Views on Intangible Assets and their Amortisation, March 2014, London, Ingland. https://www.ifrs.org/content/dam/ifrs/meetings/2014/september/asaf/pir-ifrs-3-business-combinations/ap3a-appendix-frc-report-investor-views-on-intangible-asset.pdf
FRANCIS, J.; HANNA, J. D.; VINCENT, L. Causes and effects of discretionary asset write-offs. Journal of Accounting Research, v. 34, p. 117–134, 1996.
GINER, B.; PARDO, F. How ethical are managers’ goodwill impairment decisions in Spanish-listed firms? Journal of Business Ethics, v. 132, p. 21–40, 2015.
GODFREY, J.; KOH, P. S. The relevance to firm valuation of capitalizing intangible assets in total and by category. Australian Accounting Review, v. 11, n. 2, p. 39–48, 2001.
HEALY, P.; PALEPU, K.; RUBACK, R. Does corporate performance improve after mergers? Journal of Financial Economics, v. 31, n. 2, p. 135–175, 1992.
HIETALA, P.; KAPLAN, S. N.; ROBINSON, D. T. What is the price of hubris? Using takeover battles to infer overpayments and synergies. Financial Management, v. 32, n. 3, p. 5–31, 2003.
HILTON, A. S.; O’BRIEN, P. C. Inco Ltd.: Market value, fair value, and management discretion. Journal of Accounting Research, v. 47, n. 1, p. 179–211, 2009.
HOLTHAUSEN, R. W. Accounting standards, financial reporting outcomes, and enforcement. Journal of Accounting Research, v. 47, p. 447–458, 2009.
HOOGENDOORN, M. International accounting regulation and IFRS implementation in Europe and beyond—Experiences with first-time adoption in Europe. Accounting in Europe, v. 3, n. 1, p. 23–26, 2006.
IFRS FOUNDATION. Discussion Paper—DP Business Combination—Disclosures, Goodwill and Impairment. FRS Foundation. London, UK, 2020. https://www.ifrs.org/projects/open-for-comment/
INSTRUÇÃO CVM n. 358/2002, art. 2º, XXI Instrução CVM n. 480/2009, art. 19–20. Comissão de Valores Mobiliários (CVM). Rio de Janeiro, RJ. https://conteudo.cvm.gov.br/legislacao/instrucoes/inst358.html
JENNINGS, R.; LECLERE, M.; THOMPSON, R. B. Goodwill amortization and the usefulness of earnings. Financial Analysts Journal, v. 57, n. 5, p. 20–28, 2001.
JENSEN, M. C. Agency costs of free cash flow, corporate finance and takeovers. American Economic Review, v. 76, p. 323–329, 1986.
JORDAN, C. E.; CLARK, S. J. Big bath earnings management: The case of goodwill impairment under SFAS No. 142. Journal of Applied Business Research, v. 20, n. 2, 2004.
LAPOINTE-ANTUNES, P.; CORMIER, D.; MAGNAN, M. Equity recognition of mandatory accounting changes: The case of transitional goodwill impairment losses. Canadian Journal of Administrative Sciences/Revue Canadienne des sciences de l’administration, v. 25, p. 37–54, 2008.
LEUZ, C.; VERRECCHIA, R. E. The economic consequences of increased disclosure. Journal of Accounting Research, v. 38, p. 91–124, 2000.
LI, K.; AMEL-ZADEH, A.; MEEKS, G. The impairment of purchased goodwill: Effects on market value. Social Science Research Network (SSRN). 2010.
LI, Z.; SHROFF, P. K.; VENKATARAMAN, R.; ZHANG, I. X. Causes and consequences of goodwill impairment losses. Review of Accounting Studies, v. 16, n. 4, p. 745–778, 2011.
LI, K. K.; SLOAN, R. G. Has goodwill accounting gone bad? Review of Accounting Studies, v. 22, p. 964–1003, 2017.
MARTINS, E. Goodwill: Baixa, Amortização ou Impairment? E quando originado do Passivo? Revista Fipecafi de Contabilidade, Controladoria e Finanças, v. 1, n. 1, 2020.
POWELL, S. Accounting for intangible assets: current requirements, key players and future directions. European Accounting Review, v. 12, n. 4, p. 797-811, 2003.
RAYBURN, F. R.; POWERS, O. S. A History of Pooling of Interests Accounting for Business Combinations in the United States. The Accounting Historians Journal, v. 18, n. 2, p. 155-192, 1991.
SANCHIDRIÁN, J. P.; PÉREZ GARCÍA, J.; GONZALO-ANGULO, J. A. (IR) Relevance of goodwill impairment: The case of European banking (2005–2015). Journal of Banking Regulation, v. 22, p. 24–38, 2021.
SEETHARAMAN, A.; BALACHANDRAN, M.; SARAVANAN, A. S. Accounting treatment of goodwill: Yesterday, today and tomorrow. Problems and prospects in the international perspective. Journal of Intellectual Capital, v. 5, n. 1, p. 131–152, 2004.
SHALEV, R. The information content of business combination disclosure level. The Accounting Review. American Accounting Association, v. 84, n. 1, p. 239–270, 2009.
SODERSTROM, N. S.; SUN, K. J. IFRS adoption and accounting quality: A review. European Accounting Review, v. 16, n. 4, p. 675–702, 2007.
STEVENSON, H.; MCPHEE, D. Acquiring companies: Knowing your IAS from your elbow. Accountancy Magazine. accountancymagazine.com, 2005.
SU, W. H.; WELL, P. Acquisition premiums and the recognition of identifiable intangible assets in business combinations pre- and post-IFRS adoption. Accounting Research Journal, v. 31, n. 2, p. 135–156, 2018.
VINTEN, G.; SEVIN, S.; SCHROEDER, R. Earnings management: Evidence from SFAS No. 142 reporting. Managerial Auditing Journal, v. 20, n. 1, p. 47-54, 2005.
WALKER, M. Accounting for varieties of capitalism: The case against a single set of global accounting standards. British Accounting Review, v. 42, n. 3, p. 137–152, 2010.
WU, K.; LAI, S. Intangible intensity and stock price crash risk. Journal of Corporate Finance, v. 64, 101682, 2020.
ZEFF, S. “Political” Lobbying on Proposed Standards: A Challenge to the IASB. Accounting Horizons, v. 16, n. 1, p. 43-54, 2002.
Downloads
Publicado
Como Citar
Edição
Seção
Licença
Os direitos patrimoniais dos artigos aceitos para publicação, inclusive de tradução, passam a ser de propriedade da Revista de Contabilidade do Mestrado em Ciências Contábeis da UERJ (online).
É permitida a citação parcial de artigos publicados, sem autorização prévia, desde que seja identificada a fonte. A reprodução total de artigos é proibida. Em caso de dúvidas, favor entrar em contato: (revistacontabilidadeuerj@gmail.com).
As declarações dos artigos aprovados, devem ser originalmente assinadas e enviadas pelos Correios para o endereço de contato da revista.
