In this study, the goodwill impairment is decomposed into normal impairment component, which is due to economic or financial reasons, and discretionary impairment component, which results from the discretion by managers. This study focuses on the motivation of the discretion of goodwill impairment. Empirical results find that there is significantly positive relationship between the discretionary impairment and subsequent performance for poor corporate governance, which conforms to the earnings management hypothesis. Oppositely, there exists significantly negative relationship between the discretionary impairment and subsequent performance for better corporate governance, which conforms to the signaling hypothesis.