Abstract This study analyzes the wealth effects of three court rulings relating to the amortization of intangible assets for tax purposes. Our results indicate that the Supreme Court's ruling in Newark Morning Ledger, in which the court ruled that the disputed intangible asset was depreciable for tax purposes, resulted in positive share price revisions for firms with acquired intangibles. Overall, this work provides evidence that tax-related court rulings have wealth effects for firms in a similar tax situation, and that tax benefits from intangible asset amortization influence equity values.
Dhaliwat et al. (Sun,) studied this question.