Firms strategically disclose goodwill impairment to manipulate compliance and growth opportunities.
The article explores why European firms often don't fully disclose information about goodwill impairment testing. It shows that firms strategically decide how much to disclose, with those facing higher costs being less likely to comply. However, firms with growth opportunities tend to provide more information voluntarily. Enforcement plays a key role in ensuring compliance, with weaker enforcement leading to less disclosure.