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The ESMA's finding that three-quarters of the goodwill impairments in 2011 were borne by the financial and telecoms sectors echoes similar data from investment bank Houlihan Lokey.
Putting a value on intangible assets such as synergies and cost efficiencies is difficult. Recognising impairments can be tough too: executives hate to write down valuations, especially if they were the people who bought the assets. As ESMA implies, a lot of pre-crisis purchases are looking bloated on corporate balance sheets. It is a consequence of the crisis that remains insufficiently addressed. If banks came clean on goodwill, for instance, they might enjoy an overdue stock market rerating.
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