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Goodwill Impairments: Why Corporate Mergers and Acquisitions Fail

Mergers and acquisitions are business transactions with great potential for value creation. Although they are extremely popular, mergers and acquisitions are usually a gamble, complex to structure, and even more difficult to successfully implement. While realizing the expected synergies is possible, more often than not, mergers and acquisitions are less successful than anticipated and result in substantial destruction of shareholder value. Generally, these transactions come in waves, and many believe that one is currently starting. This study reports the motivations for mergers and acquisitions, as well as the relevant accounting practices regarding goodwill under U.S. GAAP and IFRS. Then, based on current research and an analysis of eight mergers and acquisitions that recorded large goodwill impairments, recommendations are made for improved due diligence prior to completing transactions, as well as for greater accounting transparency when goodwill impairments occur.

Identiferoai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-1911
Date01 January 2014
CreatorsJotwani, Tara
PublisherScholarship @ Claremont
Source SetsClaremont Colleges
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceCMC Senior Theses
Rights© 2014 Tara Jotwani

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