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The effects of the low-interest policy on goodwill impairment tests regarding IAS 36: a theoretical and empirical evaluation of the German DAX 30 companies
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During numerous acquisitions, the GW positions of German DAX 30 companies have enormously
risen. However, this increase cannot solely be attributed to the pure number of company takeovers but
also to the introduction of IAS 36 – Impairment of Assets. On adopting IAS 36 in 2004, GW is no longer
amortised but subject to an annual impairment-test. Since then, companies consider their GW positions
more and more as recoverable. Although IAS 36 contains detailed regulations, many appreciation
margins as well as external influences affect the GW impairment-test. Accordingly, external factors
such as the low-interest policy of the ECB can be associated with GW positions and GW write-offs.
This paper uses a quantitative research design and investigates the effects of the low-interest policy of
the ECB on GW positions and its influence on the GW impairment-test in accordance with IAS 36 of
the German DAX 30 companies. Using a sample of 24 DAX 30-listed companies over a period of 12
years, this paper shows that there is a relation between the low-interest policy of the ECB on GW
positions and on GW write-offs. The negative downtrend of the KIR set by the ECB is hindering GW
impairments and therefore encourages the increase in GW positions of the German DAX 30 companies
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Goodwill Goodwill impairment Accounting IAS36 ECB-policy