Graduation Year

Spring 2014

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Marc Massoud

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© 2014 Tara Jotwani


Mergers and acquisitions are business transactions with great potential for value creation. Although they are extremely popular, mergers and acquisitions are usually a gamble, complex to structure, and even more difficult to successfully implement. While realizing the expected synergies is possible, more often than not, mergers and acquisitions are less successful than anticipated and result in substantial destruction of shareholder value. Generally, these transactions come in waves, and many believe that one is currently starting. This study reports the motivations for mergers and acquisitions, as well as the relevant accounting practices regarding goodwill under U.S. GAAP and IFRS. Then, based on current research and an analysis of eight mergers and acquisitions that recorded large goodwill impairments, recommendations are made for improved due diligence prior to completing transactions, as well as for greater accounting transparency when goodwill impairments occur.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.