دانلود رایگان مقاله انگلیسی انقلاب حسابداری دارایی نامشهود: شواهدی از استرالیا - وایلی 2018

Abstract

This study investigates how the adoption of IFRS in Australia has changed the accounting for goodwill and identifiable intangible assets (IIA). Based on unique handcollected data for 802 Australian firm-years during 2000– 2010, we find that expenses related to IIA are higher under IFRS, which is consistent with the view that IFRS accounting policies for IIA are stricter than those under Australian domestic accounting standards pre-2005 (AGAAP). Our results show two effects that accompany higher IIA expenses under IFRS, which reduce a negative impact on earnings: (i) lower goodwill expenses, and (ii) a shift in recognition of IIA from those with finite useful life to IIA with indefinite useful life. Finally, our market value analyses suggest that the market does not treat mechanical goodwill amortization as a genuine expense, but does treat as genuine expenses discretionary impairment charges, and more lenient IIA amortization under AGAAP. Our results are in line with prior Australian studies claiming that imposing stricter accounting rules for intangible assets under IFRS tends to diminish the quality of investors’ information set.

5 | DISCUSSION AND CONCLUSION

The purpose of this study is to analyze the impact of changes in accounting methods for intangible assets on how companies account for their goodwill and IIA. The Australian setting is particularly interesting as the accounting regulation for intangible assets has changed several times in a relatively short period of 20 years, with the final change being IFRS adoption. With the adoption of IFRS in 2005 (2006 financial year in Australia), subsequent treatment for goodwill changed from systematic amortization to an impairment-only regime, with IFRS prescribing specific accounting methods for IIA, which had been largely unregulated under AGAAP.

Our findings suggest a substitution effect; that is, under IFRS, IIA expenses are negatively associated with goodwill expenses, which is not the case under AGAAP. In addition, firms seem to recognize more IIA with indefinite useful life rather than finite useful life. This also allows firms to minimize annual amortization charges. We also find evidence consistent with signaling: The market positively values impairment and amortization charges, which are not the product of mechanical rules in standards.

Our findings suggest that companies impair significantly less goodwill under IFRS than they amortized and impaired under AGAAP. This finding is in line with prior research conducted in different settings such as Hamberg et al. (2011) for Sweden. At the same time, goodwill has become an increasingly more important item on the balance sheet over our sample period, subsequently resulting in companies being more prone to impairment risks. On the other hand, IIA are amortized and impaired significantly more under IFRS than under AGAAP. This suggests that by prescribing accounting policies required for IIA, IFRS may have restricted companies from avoiding negative charges relating to IIA. Companies, however, may have found a way to address this issue by shifting their IIA from finite to indefinite IIA, and subsequently, they may potentially reduce annual amortization charges. The result is consistent with prior Australian evidence by Wines and Ferguson (1993) who have observed a similar shift from goodwill to IIA in Australia under AGAAP to avoid annual amortization.