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Author Shalev, Ron
Title Managerial Discretion in Business Combinations Reporting under SFAS 141
book jacket
Descript 101 p
Note Source: Dissertation Abstracts International, Volume: 68-10, Section: A, page: 4369
Adviser: Doron Nissim
Thesis (Ph.D.)--Columbia University, 2007
This study investigates managerial discretion in implementing SFAS 141-business combinations. Specifically I examine two questions: (1) what are the determinants of business combination disclosures, focusing on materiality and the role of managerial incentives and (2) whether acquirers allocate the purchase price strategically to non-amortizable intangible assets. Overall, my results suggest that the largest increase in disclosure level on business combinations occurs when the purchase price is greater than five percent of the acquirer's total assets. Disclosure level decreases with the portion of the purchase price allocated to goodwill and with the frequency of unexpected accruals in the years leading to the business combination, suggesting that acquirers overpay for the target, distort the purchase price allocation or tend to manage earnings disclose less information on business combinations. Results also suggest that acquirers are strategic in the allocation of the purchase price to non-amortizable intangible assets. Acquirers take into account investors' perceived functional fixation on earnings and the limited usefulness of goodwill for debt contracting. However, acquirers appear to be less concerned, when allocating the purchase price, with the possible increase in likelihood of impairment and in EPS volatility
School code: 0054
Host Item Dissertation Abstracts International 68-10A
Subject Business Administration, Accounting
Alt Author Columbia University
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