search query: @author Ramanna, K. / total: 2
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| Author: | Ramanna, K. |
| Title: | The implications of unverifiable fair-value accounting: evidence from the political economy of goodwill accounting |
| Journal: | Journal of Accounting & Economics
2008 : AUG, VOL. 45:2-3, p. 253-281 |
| Index terms: | accounting standards politics agency theory goodwill accounting valuation |
| Language: | eng |
| Abstract: | This paper examines the evolution of SFAS 142, which uses unverifiable fair-value estimates to account for acquired goodwill. The study finds evidence that is consistent with the FASB issuing SFAS 142 in response to political pressure over its proposal to abolish pooling accounting. This result is interesting since this proposal was due in part to SEC concerns over pooling misuse. Furthermore, results show evidence consistent with lobbying support for SFAS 142 increasing in firms' discretion under the standard. Agency theory predicts that this kind of unverifiable discretion can be used opportunistically. |
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