This perception is collaborated by Niyama, Rodrigues, and Rodrigues (2015), who claim that in almost all cases recoverable goodwill values are calculated using the value of estimated future cash flows, derived from the use of a set of assets, or rather, from a cash generating unit.
The results showed that there are still incoherencies in the application of the rule concerning the reduction in the recoverable value of assets, both in the way they define a cash generating unit and in the recoverable amount estimate.
In this case, the first asset to be devalued due to impairment within a cash generating unit will be goodwill (CPC 15).
The cash generating unit (CGU) variable was verified in the explanatory notes, while the change in management (CHMAN) variable was verified in the reference forms of the sample companies.
Despite subjectivity being inherent to accounting itself, these authors highlight that the calculation of goodwill impairment losses may be too complex, with the need for allocating goodwill to various cash generating units and calculating the present value of future benefit flows for these units.
The results of this study show that the factors change in management (CHMAN), book-to-market (BM), number of cash generating units (CGU), variation in return on assets (AROA), and goodwill (GOODW) were significant in determining GOODWIMP losses.
Calculating future benefit flows generated by it can also be difficult, since it can be included in different cash generating units.
Cash Generating Units (CGU) can have an impact on the probability of an impairment loss.
H2: There is a significant relationship between the number of Cash Generating Units and GOODWIMP loss recognition.
The number of cash generating units (CGU) variable presented an average of 52%, which means that almost half of the companies analyzed had one CGU, which in a way mitigates the possibility of the managers engaging in earnings management via the allocation of goodwill to different CGUs in the company.