In this paper there has been made a comparison between the amortisation and the impairment methods for accounting for goodwill, with regards to their associated effects on accountingquality. Based on two qualitative characteristics of accounting information, as formulated bythe International Accounting Standards Board (IASB), the effects of the new impairment methodare examined using a value relevance and a timeliness model. The sample consists of Europeancompanies that adopted this new method of goodwill accounting, following the required adoptionof the International Financial Reporting Standards (IFRS) in 2005. The results indicatethat impairment of goodwill is actually less value relevant than amortisation, but that it doeslead to more timely accounting information. It is concluded that the objective of the IASB inissuing a new accounting standard is not completely met and it only partially contributes tohigher accounting quality.