Reflections on M&A accounting from AOL's acquisition of Time Warner

In early 2000, AOL announced the acquisition of Time Warner for $162 billion. The acquisition, one of the largest in history, generated $127 billion of goodwill. Yet after only a few years, the merged firm had taken an impairment charge for $99 billion, and the acquisition was viewed as a colossal failure. This study examines how the deal was initially reported and valued, the timeliness of the goodwill impairments, and how the market interpreted the reporting. Given this field evidence, I revisit key questions on M&A reporting standards and implications for future research.