Since 2001 under U.S. GAAP, and since 2005 under International Financial Reporting Standards (IFRS), goodwill is no longer amortized on the income statement according to fixed schedules. Instead, companies must write off goodwill only when the goodwill is impaired based on business valuations by independent auditors. What effect did changes in accounting for goodwill have on share prices? To answer this question, we looked at this accounting change's impact on share price in two ways.
