Write-offs of goodwill are confusing. When they happen, companies insist they do not matter. Goodwill is the excess paid for an asset over its book value. Writing it down is a mere accounting adjustment, bosses tend to say. Yet those same bosses go to inordinate lengths to delay recognising such supposedly irrelevant, non-cash losses. On May 13th Tata Steel, an Indian firm, announced a $1.6 billion impairment, mainly of its takeover of Corus, a British steelmaker. The deal happened six years ago. It has been clear for at least four years that it has been a financial disaster. Why recognise that now?
展开▼
