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dc.contributor.authorHamberg, Mattias
dc.contributor.authorPaananen, Mari
dc.contributor.authorNovak, Jiri
dc.date.accessioned2011-10-06T14:01:13Z
dc.date.available2011-10-06T14:01:13Z
dc.date.issued2011
dc.identifier.citationHamberg , M , Paananen , M & Novak , J 2011 , ' The adoption of IFRS 3: the effects of managerial discretion and stock market reactions ' , European Accounting Review , vol. 20 , no. 2 , pp. 263-288 . https://doi.org/10.1080/09638181003687877
dc.identifier.issn0963-8180
dc.identifier.otherPURE: 398455
dc.identifier.otherPURE UUID: c2b58dfe-3c15-46b0-9104-cc3f396a58a1
dc.identifier.otherWOS: 000291814800003
dc.identifier.otherScopus: 79959207498
dc.identifier.urihttp://hdl.handle.net/2299/6606
dc.descriptionOriginal article can be found at : http://tandfprod.literatumonline.com/ Copyright Taylor & Francis
dc.description.abstractIn recent years, several accounting standards, including IFRS 3, issued by the IASB, substitute historical cost with fair value measures and so provide managers with increased discretion to determine fair value without an actual market for the asset. Using Swedish data, we document the accounting consequences of the adoption of IFRS 3 and the stock market's reaction. After the adoption of this standard in January 2005 the amount of capitalized goodwill increased substantially. Goodwill impairments under IFRS are considerably lower than goodwill amortizations and impairments made under Swedish GAAP. Consequently, the adoption of IFRS 3 increased reported earnings. An analysis of economic incentives influencing the impairment decision at the initial adoption of IFRS 3 shows that tenured management is negatively associated with the impairment decision. However, most firms did not reclassify goodwill or make additional impairments. Firms with substantial amounts of goodwill yielded abnormally high returns despite abnormally low earnings. Investors seem to, correctly or incorrectly, have viewed the accrual-based increase in earnings stemming from IFRS 3 as an indication of higher future cash flows.en
dc.format.extent26
dc.language.isoeng
dc.relation.ispartofEuropean Accounting Review
dc.subjectSFAS-142 goodwill impairments
dc.subjectaccounting conservatism
dc.subjectearnings management
dc.subjectinformation
dc.subjectflexibility
dc.subjectaccruals
dc.subjectprices
dc.titleThe adoption of IFRS 3: the effects of managerial discretion and stock market reactionsen
dc.contributor.institutionSocial Sciences, Arts & Humanities Research Institute
dc.contributor.institutionDepartment of Accounting, Finance and Economics
dc.description.statusPeer reviewed
dc.date.embargoedUntil2013-01-01
rioxxterms.versionAM
rioxxterms.versionofrecordhttps://doi.org/10.1080/09638181003687877
rioxxterms.typeJournal Article/Review
herts.preservation.rarelyaccessedtrue


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