Impact of Goodwill, Intangible Assets, Amortisation and Impairment Charges on Market Value of Listed Manufacturing Firms in Nigeria

Abstract

This study examines goodwill, amortization and impairment charges and intangible asset on the market value of listed manufacturing firms in Nigeria. The principle guiding recognition, identification, future of economic value and measurement of Goodwill have been conflicting. Amortisation and impairment charges are often significant during 
financial crises and the net intangible asset is increasingly becoming important as companies disclose them in their annual reports. Despite their relevance, companies measure and disclose them using different approaches and this creates conflict that need to be investigated. The correlational research design was adopted for the study using a 
sample size of 45 listed manufacturing firms in Nigeria. Inferential statistics was used in analysing the data obtained from secondary sources. The Findings among others indicates that goodwill, intangible asset, amortization and impairment charges show significant 
positive impact on market value. Therefore, the study concludes that goodwill, intangible asset, amortization and impairment charges impacts on market value. Thus, the study recommends that standard setter and regulatory authority should to take these assets into account and make sure that companies report them more closely. Specifically, companies 
should report goodwill and intangible assets in line with IAS, 38, IAS 36 and IFRS 3 so as to provide users of accounting report with more information for informed decision. Further, with regard to intangible asset, managers are expected to have positive disposition in respect of their disclosure so that the firms’ financial statement will show 
the real value of intangible assets in the companies. 

Keywords: goodwill, amortization and impairment charges, intangible asset, and 
market value