We examine whether the formal, public recognition of failure through goodwill impairment reporting under SFAS No. 142 triggers managerial learning that improves subsequent acquisition decisions. Using a difference-in-differences design and a large sample of U.S. acquisitions, we find that deals undertaken after impairment recognition exhibit significantly higher post-acquisition profitability, longer evaluation periods, and lower premiums—consistent with more disciplined deal-making. These effects are distinct from learning through impairment testing or past poor performance alone, and persist after controlling for firm characteristics, deal experience, and governance changes. Our findings suggest that recognition-induced learning—prompted by the accountability and salience of public financial reporting—can meaningfully shape real investment behavior. In doing so, we identify a behavioral channel through which financial reporting enhances internal governance, even when external informativeness is limited. The results contribute to research on accounting’s role in managerial learning, goodwill regulation, and the behavioral effects of public recognition regimes.