Discussion of “CEO compensation and fair value accounting: Evidence from purchase price allocation”. Daniel A. Cohen CAPANA Conference Chengdu, July 2 2010. General Comments. Primary Contribution: Provide evidence that CEO bonuses leads to overstatement of goodwill
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Daniel A. Cohen
Chengdu, July 2 2010
Purchase Price Accounting Treatment
Not Subject to Amortization.
Subject to a Mandatory Annual
Intangible Assets Separate
Indefinite-Life, 4% (Trademarks)
Amortized over Economic
In-Process R&D, 4.6%
Written-off at Acquisition
Net Tangible Assets,
Restated to Fair Value
“In this study we investigate the effects of the above aspects of compensation on managerial accounting choices.”
The effect of accounting choices (which are subject to managerial manipulation) on CEO compensation.