The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Niklas Sandell . Photo

Niklas Sandell

Senior lecturer

Niklas Sandell . Photo

Accounts and Accountability. Impairment of goodwill

Author

  • Niklas Sandell

Summary, in English

The core sense of accountability is the demanding and giving of accounts. Especially, when the outcome is negative, the management can be expected to account for the failure event, contextualizing the numerical outcome. In this paper the particular failure event of goodwill impairment, and the response of the management in the financial report is studied. Even though not necessarily being a failure event, it is reasonable to assume that an impairment will, if not explained, be perceived as such. Using an account typology the responses in financial reports have been scrutinised. In general the explanatory value of those responses is weak. Accountability does not seem to imply a requirement for the management to explain themselves in the financial report. The role of the financial report as a mean to hold the management accountable is likely weakened by the institutionalization of the reporting language, partly through the professionalization of report writing. Also, the possibilities of explaining complex cause and effect relationships might be accepted as limited. In this sense the accountability requirements of the financial report extend not much further than to the non-contextualized accounting language. Even though the performative quality of the language enhancing our understanding of the particular failure event is limited, the language used still performs as part of creating or protecting the discourse of “mergers and acquisitions”, deemphasising the rather few impairments made, describing them as being outside the control of the management or fairly insignificant. In this sense the language takes part in preserving the image of mergers and acquisitions as a prestigious and value creating business activity.

Department/s

  • Department of Business Administration

Publishing year

2014

Language

English

Publication/Series

Working paper series / Lund Institute of Economic Research, School of Economics and Management

Issue

1

Document type

Working paper

Publisher

Lund Institute of Economic Research

Topic

  • Business Administration

Keywords

  • accounts
  • accountability
  • financial reporting
  • impairment
  • goodwill

Status

Published

ISBN/ISSN/Other

  • ISSN: 1103-3010