An Analysis of Corporate Lobbying Behaviour : A Case for Accounting for Purchased Goodwill in Australia

This study examines the lobbying position of firms that made submissions to the Australian Accounting Standards Board (AASB) on ED 68 that proposed to ban the use of the Inverted Sum-of-Years Digit Method (ISOYD) method of goodwill amortisation. The contents of all corporate submissions were numerically transformed to obtain a measure of the strength of accounting method preferences indicated therein. The results show that agency related proxies for debt covenants and political costs partially explain the firms’ lobbying position on the retention of the ISOYD method.