Why reduce profit? accounting choice of impairments in Swedish listed corporations

Pernilla Broberg, Sven-Olof Collin, Torbjörn Tagesson, Monika Axelsson, Charlotta Schéle

    Research output: Contribution to journalArticlepeer-review


    Positive accounting theory and institutional theory are used in conjunction in order to explain accounting choice. The theory is applied on IAS 36 (impairment of assets), and tested on a sample of listed Swedish corporations. We find that the choice is mainly induced by agency and general business factors and to a slighter degree by institutional factors. Especially, we find that institutional influence will be stronger when it is in the interest of important stakeholders; that impairments can be used as a mean of signalling trust to absent owners and that the institutional element of tradition cannot be tested separately from the agency element of opportunism.

    Original languageEnglish
    Pages (from-to)49-71
    Number of pages22
    JournalInternational Journal of Accounting and Finance
    Issue number1
    Publication statusPublished - 2011

    Swedish Standard Keywords

    • Business Administration (50202)


    • Sweden
    • absent owners
    • accounting choice
    • asset impairment
    • institutional theory
    • opportunism
    • positive accounting theory
    • stakeholders
    • tradition
    • trust


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