This paper argues that managerial discretion plays an important role in goodwill write-off decisions under IFRS 3. We carry out an empirical analysis on Finnish listed companies between 2005 and 2009. Our evidence suggests that a new CEO is more likely to impair goodwill. We find also that goodwill impairment charges occur when earnings would have been negative, which points in the direction of earnings bath-type of behavior. Furthermore, our results show that financial markets reduce the problems of asymmetric information associated with goodwill accounting.