Discussion paper on goodwill and impairment

On 19 March, the IASB published a discussion paper on goodwill and impairment. Comments may be submitted no later than 15 September 2020 (unless the date is pushed back because of the COVID-19 outbreak).

Keywords: Mazars, Thailand, IFRS, IASB, COVID-19, IFRS 3, Goodwill, Impairment

29 June 2020

This paper, which will be discussed in more detail in a future edition, presents the Board’s current thinking on the issues raised during the post-implementation review of IFRS 3 on business combinations. The paper includes:

  • a section on improving disclosures about acquisitions: management’s objectives for the acquisition will in particular be disclosed in the year of acquisition. In subsequent financial periods, disclosures about how the acquisition has performed against those objectives will be provided;
  • a section on the accounting for goodwill: as expected, at this stage the Board considers that goodwill should not be amortised (i.e. the impairment-only model should be retained). Nevertheless, proposals are being made for simplifying impairment tests and making them less costly, by providing relief from the requirement to perform a test annually if there is no indication that an impairment has occurred, and by simplifying the requirements for estimating value in use.

The IASB highlights the importance of this issue for stakeholders and encourages feedbacks concerning both disclosures and the accounting of goodwill.

The discussion paper can be found on the IASB site.