Accounting Standards Board of Japan
Financial Accounting Standards Foundation
Sustainability Standards Board of Japan

ASBJ Publishes Research Paper No. 2, Quantitative Study on Goodwill and Impairment

3 October 2016


The ASBJ published Research Paper No. 2, Quantitative Study on Goodwill and Impairment with a view to contribute to the global discussion regarding the accounting for goodwill.

In response to the request from the International Accounting Standards Board (IASB), the ASBJ staff have conducted a quantitative study on goodwill and impairment in cooperation with European Financial Reporting Advisory Group (EFRAG) staff.

The objective of the quantitative study is to illustrate the trends in the amounts of goodwill and impairment, with the aim of facilitating the technical and conceptual discussions related to the accounting for goodwill by accounting standard setters around the world.

The quantitative study covers 1,069 listed companies out of 1,280 listed companies that constituted the four major stock market indices in the United States, Europe, Japan and Australia from 2005 to 2014. Listed companies that were excluded from the quantitative study are as follows:

  1. for the each stock market index, companies that had data that was not available for any of the years between 2005 and 2014;
  2. for the stock market index in Japan, companies that applied accounting standards other than Japanese GAAP in 2014; and
  3. for the stock market index in Australia, companies that applied accounting standards other than IFRS in 2014

The study presents data on the following items:

  1. The trends in the amount of goodwill for each stock market index and the goodwill amount per company from 2005 to 2014.
  2. The trends in the ratio of goodwill to net assets and the ratio of goodwill to market capitalisation from 2005 to 2014.
  3. The trends in the disaggregation of market capitalisation into goodwill, net assets other than goodwill and unrecognised value from 2005 to 2014.
  4. The trends in impairment compared to the points or the price of the stock market index, and the ratio of goodwill impairment (and amortisation, if applicable) to the goodwill amount of the previous year-end from 2005 to 2014; and
  5. Goodwill per company and the ratio of goodwill to net assets by industry for 2014.

We hope that the research paper facilitates the technical and conceptual discussions related to the accounting for goodwill internationally.

EFRAG’s quantitative study, WHAT DO WE REALLY KNOW ABOUT GOODWILL AND IMPAIRMENT? – A QUANTITATIVE STUDY can be accessed here.