Goodwill Impairment Charges and Analyst Forecast Properties
Year: 2014
Type: article
Abstract: SYNOPSIS We examine the association between goodwill impairment charges and analysts' forecast accuracy and dispersion. We compare a test sample of firm-quarters with reported goodwill impairment charges during 2003–2007, and two control samples (matched on propensity scores and performance) of firm-quarters that do not report impairment charges. We find that analysts' forecasts are less accurate and more dispersed for the impairment sample than for the control samples. The magnitude of impairment charges is also negatively associated with forecast accuracy and positively associated with forecast dispersion. However, two forms of monitoring, auditor industry specialization and institutional ownership, reduce the adverse effect of goodwill impairments on analyst forecast dispersion. JEL Classifications: G14; M41; M44
Source: Accounting Horizons
DOI: 10.2308/acch-50941
Institutions: Lehigh University, Villanova University, Temple University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2090993440