Takeover gains and the recognition of identifiable intangible assets

Su, W

Takeover gains and the recognition of identifiable intangible assets

Su, W

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Publication Type:: Thesis
Issue Date:: 2011

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Field	Value	Language
dc.contributor.author	Su, W
dc.date.accessioned	2012-04-17T05:41:08Z
dc.date.accessioned	2012-12-15T03:53:42Z
dc.date.available	2012-04-17T05:41:08Z
dc.date.available	2012-12-15T03:53:42Z
dc.date.issued	2011
dc.identifier.uri	http://hdl.handle.net/10453/20400
dc.description	University of Technology, Sydney. Faculty of Business.	en
dc.description.abstract	This thesis investigates a number of issues surrounding the recognition of identifiable intangible assets consequent to business acquisitions in Australia. There is a body of research that evaluates a firm’s decision to allocate acquisition premiums to identifiable intangible assets, rather than goodwill, and this behaviour is commonly labelled opportunistic (e.g. Walker 1989; Woolf 1989; Carlin & Finch 2007). This thesis extends this literature in two ways. First, it evaluates the association between identifiable intangible assets recognised in a business combination and acquisition premiums paid in Australia. Second, it evaluates the relation between amounts recognised as identifiable intangible assets and postacquisition performance. Of particular interest is whether the recognition of identifiable intangible assets encourages ‘overpayment’ and as a consequence is associated with poor post-acquisition performance. This evaluation is also undertaken across periods before and after the introduction of International Financial Reporting Standards (IFRS) in 2005, which changed the accounting treatments for identifiable intangible assets and goodwill. In the period prior to the transition to IFRS, there is evidence that firms recognising identifiable intangible assets made acquisitions with higher acquisition premiums. However, this did not persist subsequent to the transition to IFRS when the opportunistic incentive to avoid recognising goodwill ceased. There is also evidence of firms recognising identifiable intangible assets reporting poorer post-acquisition performance. These results are consistent with the ability to recognise identifiable intangible assets encouraging overpayment, and firms attempting to obscure this through making opportunistic accounting choices.	en
dc.format	Thesis (PhD)	en
dc.language.iso	en	en
dc.relation	https://opus.lib.uts.edu.au/bitstream/10453/20400/2/02Whole.pdf
dc.relation.replaces	http://hdl.handle.net/2100/1300
dc.rights	info:eu-repo/semantics/openAccess
dc.rights	The author owns the copyright in this thesis including all reproduction and reuse rights for the work. The work may not be altered without the permission of the copyright owner. Attribution is essential when quoting or paraphrasing from this thesis.
dc.rights	au.edu.uts.lib/ppc
dc.subject	Acquisitions.	en
dc.subject	Intangible assets.	en
dc.subject	International Financial Reporting Standards.	en
dc.subject	Takeovers.	en
dc.subject	Goodwill.	en
dc.subject	IFRS.	en
dc.title	Takeover gains and the recognition of identifiable intangible assets	en
dc.type	Thesis
utslib.copyright.status	open_access

Abstract:

This thesis investigates a number of issues surrounding the recognition of identifiable intangible assets consequent to business acquisitions in Australia. There is a body of research that evaluates a firm’s decision to allocate acquisition premiums to identifiable intangible assets, rather than goodwill, and this behaviour is commonly labelled opportunistic (e.g. Walker 1989; Woolf 1989; Carlin & Finch 2007). This thesis extends this literature in two ways. First, it evaluates the association between identifiable intangible assets recognised in a business combination and acquisition premiums paid in Australia. Second, it evaluates the relation between amounts recognised as identifiable intangible assets and postacquisition performance. Of particular interest is whether the recognition of identifiable intangible assets encourages ‘overpayment’ and as a consequence is associated with poor post-acquisition performance. This evaluation is also undertaken across periods before and after the introduction of International Financial Reporting Standards (IFRS) in 2005, which changed the accounting treatments for identifiable intangible assets and goodwill. In the period prior to the transition to IFRS, there is evidence that firms recognising identifiable intangible assets made acquisitions with higher acquisition premiums. However, this did not persist subsequent to the transition to IFRS when the opportunistic incentive to avoid recognising goodwill ceased. There is also evidence of firms recognising identifiable intangible assets reporting poorer post-acquisition performance. These results are consistent with the ability to recognise identifiable intangible assets encouraging overpayment, and firms attempting to obscure this through making opportunistic accounting choices.

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http://hdl.handle.net/10453/20400