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Accounting Policy Choice for Negative Goodwill

  • Yukari TakahashiEmail author
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Part of the Advances in Japanese Business and Economics book series (AJBE, volume 6)

Abstract

The purpose of this study is to reveal the determinants of the amortization period of negative goodwill in order to determine whether the choice of amortization period reflects the management’s perception of the future outlook. The analysis results suggest that the management chooses a shorter amortization period when the case resulting in negative goodwill is relief-oriented and a longer amortization period when the transaction is under common control. This indicates that the choice of amortization period for negative goodwill may reflect the management’s perception of the duration in which the business combination will incur costs or loss and that systematic amortization—which was a requirement before the Accounting Standard for Business Combinations in Japan was revised—might have offered useful information on the future outlook of the company.

Keywords

Accounting policy Amortization Bargain purchase Business combination Negative goodwill 
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Copyright information

© Springer Japan 2014

Authors and Affiliations

  1. 1.Graduate School of Social SciencesTokyo Metropolitan UniversityHachiojiJapan

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