The relevance of goodwill in the evaluation process of brazilian companies
Abstract
The objectives of this paper are: (i) to analyze the relevance of accounting variables to explain the behavior of the stock prices of the Brazilian companies negotiated in the São Paulo Stock Exchange; (ii) to consider a model for calculation of goodwill; (iii) to check the incremental explanatory power of goodwill for the stock prices. International studies on intangible capital and goodwill highlight that the accounting information given in accordance with the American norms and standards, specifically in the case of companies of the new economy, has no predictive power for the evaluation of the behavior of stock prices. The sample used here consists of financial and non-financial companies selected among those who owned stocks traded at the Bovespa in the period between 1998 and 2006. The study used the technique of panel data and, in accordance with the results, showed that the market stock prices of the Brazilian companies can be explained by accounting variables (profit, equity, differed asset) and by goodwill, with statistic statistically significant coefficients.
Key words: differed asset, goodwill, accounting information, evaluation of companies, stock market.
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