Relevance of goodwill and periods of recession: evidence in the Brazilian capital market
DOI:
https://doi.org/10.21680/2176-9036.2021v13n2ID20386Keywords:
Goodwill, Value relevance, Capital market.Abstract
Purpose: Analyze the relevance of Goodwill for the Brazilian capital market and verify for possible differences in periods of economic recession.
Methodology: Economic and financial data of companies that trade shares in Brazil, Bolsa e Balcão (B3) were used quarterly in the period from 2011 to 2018. To measure the relevance of Goodwill, the residual value assessment model that is based on Ohlson's studies (1989) and Ohlson (1995). For data analysis, quantile regression was chosen, in quantiles 0.10; 0.25; 0.50; 0.75 and 0.90.
Results: The market reacts positively to the increase in Goodwill at all levels (0.10; 0.25; 0.50; 0.75; 0.90) of the companies analyzed, which suggests that the increase in its value in relation to the asset it implies an increase in market value, not only on average, but for all companies, which converges with the findings of Hartwig (2018) and Faleiro and Souza (2018). In periods of economic recession, it is clear that the companies allocated in the 0.25, 0.50 and 0.90 quantiles are sensitive to a decrease in market value, which shows that the crisis has implications for these companies. In addition, there is no significant difference in the relevance of Goodwill in times of economic crisis and in periods of non-existence of the economic crisis.
Contributions of the Study: As a theoretical contribution, we highlight the collection of data in a more timely manner, in which the Market Value variable was collected on the date of publication of the reports and the use of quantile regression, a different approach, in which we can observe in which range the variation of the Goodwill is more relevant to the market. Even so, it is emphasized that the results of the study are important for external users, especially when considering the discussion that occurs in the IASB about Goodwill.
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