Date of Award

Spring 5-1-2014

Degree Type

Honors College Thesis



First Advisor

Nell Adkins


This study examines approximately seventy firms for evidence of earnings management during implementation of ASU No. 2011-08 Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment and ASU No. 2012-02 Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. These ASUs allow for an optional qualitative test that, if passed, would allow firms to forgo the existing quantitative tests in testing for the impairment of goodwill and other indefinite-lived intangible assets. Prior literature has shown that managers use impairments to engage in earnings management. The Big Bath theory suggests that managers take impairments in years in which earnings are already poor. This study examines a firm’s decision to impair in relation to the timing of the impairment and the firm’s Big Bath status in Broadcast Media industry in the years 2010, 2011, and 2012. Probit and OLS regression are used to examine the reporting behavior of these firms. The estimated effects are insignificant across the limited sample examined, and the results are inconclusive, most likely a function of the small sample size and methodological choices employed in the study.

Available for download on Tuesday, March 02, 2219

Included in

Accounting Commons