State of the art and critical review of the empirical accounting research with regard to goodwill impairment only approach according to IFRS

The Impairment Only Approach (IOA) is mandatory for the subsequent measurement of the derivative goodwill according to SFAS 142 and IFRS 3 for many years. Ever since the political and discretional leeway of the IOA face critics from a national as well as an international level. This study analyses the international empirical goodwill research, because the International Accounting Standards Board (IASB) still believes after the Post Implementation Review that the IOA provides decision useful information. Despite some evidences for the value relevance of the IOA, our analysis reveals verifiable reasons for opportunistically management behaviour at the subsequent measurement of the goodwill (e.g. big bath accounting) as well as insufficient disclosure compliance in the (consolidated) notes according to IAS 36.