EU companies write off €76bn of goodwill European companies were much more bearish about the value of their past acquisitions last year, reporting out their biggest goodwill impairments since the financial crisis. Members of the Stoxx Europe 600 index of large listed European businesses wrote off €76bn of goodwill in 2011, according to an annual study by Houlihan Lokey, the US investment bank. This was up from just €14bn in 2010 and exceeded the €71bn of write-offs in 2008 at the height of the crisis. Goodwill is created when the price of an acquisition exceeds the stated value of the target's assets. Depressed asset values in financial markets and a deteriorating economic outlook can lead to goodwill impairments - cuts in the value of goodwill on the balance sheet - as managers revisit optimistic assumptions used in acquisitions. Such write-downs eat into profit. Stoxx Europe 600 companies spent €1.6tn on acquisitions between 2007 and 2011 and booked €219bn in goodwill impairments over the same period. More than 70 per cent of the impairments taken in 2011 - a year when company profits continued to recover - were recorded by companies in the banking and telecoms sectors, it added. The biggest was at Intesa Sanpaolo, Italy's largest retail bank by assets, which took a €10bn goodwill writedown in its annual results, mainly related to the bank's creation in 2007 when Banca Intesa bought Sanpaolo IMI. Other Italian companies - including UniCredit and Telecom Italia - also featured prominently in the list of large writedowns, as did the UK's Rio Tinto, Germany's Deutsche Telekom and France's Carrefour, the supermarket operator that suffered impairments in its Italian and Greek operations. The trend for 2012 goodwill impairments is unlikely to become clear for several months. Houlihan Lokey expected they would be substantially larger than in 2010 but less than in 2011, perhaps coming in at €40bn-€60bn against a backdrop of downbeat economic expectations and equity markets that have still not yet recovered to their pre-crisis peaks. "We have still not seen the goodwill write-offs we would have expected," said Sandy Purcell, senior managing director and head of international financial advisory services at Houlihan Lokey. Everybody has been pushing this off with the expectation that market capitalisations will improve and impairments will not have to be taken. That just hasn't occurred," he added. The unusually large number of listed companies trading at less than their book value - a phenomenon that is particularly marked in financial services, real estate and metals - raised the prospect of further goodwill impairments, Houlihan Lokey added.