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Date: 2024-05-29 Level: Bachelor thesis in Business Administration, 15 cr Institution: School of Business, Society and Engineering, Mälardalen University Authors: Nedder Ellahib Haval Said 96/10/20 98/11/08 Title: The relationship between goodwill impairments & profitability - A study about the relationship between goodwill impairments and profitability in listed Swedish companies. Supervisor: Dariusz Osowski Keywords: Goodwill Impairments, IFRS, Accounting, Profitability, Agent Theory Research questions Can a connection between profitability and goodwill impairments be proven?How can the choice to account for goodwill impairments be explained using an agent theoretical perspective? Purpose: The purpose of this study is to explore listed companies in Sweden and analyze the relationship between possible goodwill impairments and the companies' profitability. Then, through the agent theory, examine how the accounting of goodwill impairments and its impact on the profitability of listed companies is perceived by investors, shareholders and managers. Method: A quantitative study with observations of annual reports and regression models. Conclusion: The study shows a negative relation between goodwill impairments and profitability in listed Swedish companies, this relation has different strength depending on what profitability measure is used in relation with goodwill impairments. The study states that company management should, based on an agent-theoretic perspective, avoid goodwill impairments in order to report a better economical position. |
