How is goodwill impairment driven by relative firm performance Research Proposal

How is goodwill impairment driven by relative firm performance Evidence from Germany - Research Proposal Example Hence, they are obtained as excess cost of the acquired entities over the fair value of liabilities and assets (Ding, Richard and Stolowy, 2008). The concept â€Å"goodwill† was first introduced by Financial Accounting Standards Board (FASB) during June 2001 with the help of statement of Financial Accounting Standards (141 and 142) under the rules and regulations of Generally Accepted Accounting Principles (GAAP) of the United States (i.e. US GAAP) (Wiese, 2005). However, there was modification in the issuance of the concept during 2004. It was revised for international convergence, which actually took place after four years. Churky (2005) had studied the relevance and appropriateness of new standards related to goodwill impairment with the help of test market valuation, which discovered that there is evidence for weak impermanent of the goodwill. Further, research was done by Devalle and Rizzato (2012) focussing on the quality of mandatory disclosure that is related to the goodwill impairment. Their research identified that there was low disclosure index and huge difference between stock market performances. Vichitsar awong (2007) had also studied the relevance of goodwill impairment by examining relative efficiency of the companies in the US. His study revealed that goodwill impairment identifies decrease in comparative efficiency of the companies. The study aims at deciphering the relationship that is developed by Vichitsarawong (2007) with respect to goodwill impairment; however, in this research, emphasis has been given on European realities Germany. The main reason for selecting Germany for the research lies in the fact that it is the largest economy in the European nation. It also presents the highest Gross Domestic Product (GDP) of the nation over the past years. The commercial and accounting policies of