In order to obtain the PhD degree, Tonny Stenheim has submitted the thesis entitled:

“Decision usefulness of goodwill reported under IFRS”

Resume:
The dissertation investigates the decision usefulness of goodwill-accounting numbers. Theory and methodology from value relevance, earnings-management and corporate-governance literature are employed in order to investigate the decision usefulness. The dissertation compares the value relevance of goodwill reported under the impairment-only method (current IFRS) with the value relevance of goodwill reported under alternative accounting methods. It also investigates the extent to which goodwill-impairment losses under IFRS are associated with variables for economic impairment and/or earnings-management incentives. And finally, it investigates whether an estimate of misrepresentation of economic impairment in goodwill is associated with earnings-management incentives and/or corporate-governance mechanisms.

The results suggest that the impairment-only method provides accounting numbers that more faithfully depict economic fundamentals as reflected in stock prices. The results also suggest that reported goodwill-impairment losses are not strongly affected by earnings-management incentives. Still, misrepresentation of economic impairment in goodwill does not seem to be constrained by corporate-governance mechanisms. In overall, these findings support the recently implemented impairment-only method under current IFRS.

Supervisors:
Professor Christian Petersen, Department of Accounting and Auditing, Copenhagen Business School

Associate Professor Erlend Kvaal
Department of Accounting - Auditing and Law
BI Norwegian Business School

Assessment Committee:
Associate Professor Ole Sørensen (chair), Department of Accounting and Auditing, Copenhagen Business School

Professor Kjell Henry Knivsflå, Department of Accounting, Auditing and Law, Norges Handelshøyskole (Bergen)

Professor Christopher Nobes, School of Management, Accounting, Finance and Economics, University of London

Reception:
After the defence LIMAC PhD School hosts a reception at Solbjerg Plads 3 in “Rotunden” on second floor (above the canteen)

Thesis:
The thesis is available here