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This study investigates the effect of goodwill accounting on the usefulness of earnings data as an indicator of share value for a large sample of French listed companies over the period 2001-2005. This issue is of special interest because, since January 1, 2005, the IASB issued the IFRS 3 which changed the method of accounting for goodwill from systematic amortization to an approach that requires annual testing for impairment. Our results suggest that neither goodwill impairment nor amortization improve the relevance of accounting figures as indicators of firm value.