We investigate how different motives shape the initial accounting for goodwill in a setting dominated by controlling owners, using data from 1112 acquisition analyses reported by Swedish listed acquiring firms. In contrast to prior studies, we find no evidence that earnings-based compensation affects the proportion of the purchased price accounted for as goodwill. Instead, we find that when a family-owned firm is the acquirer, a larger proportion of the purchase price is accounted for as goodwill than as specific assets and liabilities. These two findings indicate that controlling owners may curb managerial motives, while controlling family owners apply the discretion of IFRS 3 according to their motives. We also find in this setting that acquisition-related motives have a significant impact on the proportion of the purchased price accounted for as goodwill. Overall, our analyses indicate that the motives shaping goodwill accounting choices depend on the institutional setting.
We study the association between the gender of the Chief Executive Officer (CEO) and the probability that firms go public through an Initial Public Offering (IPO), using data for the full population of Swedish IPO firms from 2005-2017, and matched private firms. We find that firms that go public are less likely to have a female CEO. The results are robust when we test for a change of CEO: firms that switch from a male to a female CEO are less likely to go public, and when we consider the gender balance among the board of directors.
We investigate the appointments of directors and CEOs of 439 private Swedish firms during afive-year period before they successfully completed an IPO. We utilize detailed Swedish data to explore how a firm?s governance appointments evolve in the period prior to a successful IPO. Our data contains complete information about all individual decision-makers of all Swedish private limited firms, making it possible for us to track all governance appointments among IPO firms, and use matched non-IPO firms to discern what can uniquely be attributed to the IPO process. We document that 70% of the incumbent IPO directors were appointed during the five-year periodprior to the IPO, and more than half were appointed one year before the IPO date. We further find that IPO firms are more likely to appoint new directors compared to matched firms during the period leading up to the IPO. Focusing on the IPO firms, we find that firms aiming for the main market appoint directors earlier in the process compared to firms aiming for lower-tier markets. Finally, we find that firms that appoint a larger proportion of directors are more likely to appoint a new CEO before completing an IPO. This result holds regardless of what market the firms successfully completed the IPO.