Abstract
This paper investigates determinants of amortization period for negative goodwill in Japan by examining whether firms had chosen amortization period based on managers’ expectation of future restructuring costs. Results show that firms could chose the shorter amortization period in relief business combinations , and longer amortization period in business combinations under common control.These results suggest that firms had chosen amortization period corresponding to expected restructuring costs, and that systematic amortization required by prior accounting standard could provide useful information about the company’s future prospects.
