Year: 2026
Type: book-chapter
Abstract: In this chapter, based on the results of the previous studies (especially the follow-up interviews), we conduct the short- and long-term event studies on goodwill impairment loss announcements in order to verify the appropriateness of stakeholders’ (especially financial analysts’) perception of the “too little, too late” issue. The short-term analysis confirms that stock prices and volume react to goodwill impairment announcements. Additionally, when splitting the sample between firms adopting Japanese GAAP and IFRS, we observe negative abnormal returns and cumulative abnormal returns for both subsamples. We also observe positive and statistically significant abnormal volume responses. These results suggest that goodwill impairment announcements are likely to bring new information to market participants. Furthermore, we also analyze the long-term cumulative abnormal returns. The results reveal that cumulative abnormal returns begin to decline before the impairment announcement date. This result suggests that market participants may be aware of goodwill impairment at an early stage, which is consistent with the results of previous studies. The result also shows that there is a decreasing trend in cumulative abnormal returns over a long period of time before the announcement date for Japanese-GAAP-adopting firms; however, no reliable results showing a similar pattern were obtained for IFRS-adopting firms.
Authors: Toshitake Miyauchi, Tomoaki Yamashita
Institutions: Otemon Gakuin University, Fukui Prefectural University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7171980328