Professional Documents
Culture Documents
Goodwill Webcast Slides English
Goodwill Webcast Slides English
Discussion Paper
Business Combinations—
Disclosures, Goodwill and Impairment
The views expressed in this presentation are those of the presenter, not necessarily
those of the International Accounting Standards Board or IFRS Foundation.
Copyright © 2020 IFRS Foundation. All rights reserved.
Before we start 22
Housekeeping
The views expressed are those of the presenters, not necessarily those of the International
Accounting Standard Board (Board) or the IFRS Foundation.
To ask a question during the webinar, type it into the designated text box on your screen and
click ‘submit’. You can submit questions at any time during the presentation. We’ll try to
answer them at the end of the presentation.
The Discussion Paper 3
C Can the impairment test Yes, provide relief from the annual
be simplified? impairment test and simplify value in use.
Other topics • Present on the balance sheet the amount of total equity excluding goodwill.
• Do not change recognition of intangible assets separately from goodwill.
Improving disclosures about acquisitions 5
• Synergies are often an important part of an Require companies to disclose in the year of
Expected acquisition. acquisition the amount, or range of amounts,
synergies • Help investors better understand the factors of synergies expected from an acquisition.
that contributed to the acquisition price.
Defined benefit • Some investors consider these liabilities to Require companies to disclose the amount
pension form part of the capital employed for of defined benefit pension liabilities and debt
liabilities & acquisitions. of the acquiree at the acquisition date,
debt • Needed to assess return on capital employed. separately from other classes of liabilities.
goodwill
impairment loss
goodwill
other
headroom assets
other
assets
If acquired business is run separately: If acquired business is integrated with acquirer’s business:
tested for impairment separately combined business is tested for impairment
impairment loss no impairment loss
A Can the impairment test be made more effective? 10
• It is not feasible to make the • The test cannot always signal The disclosure requirements
impairment test for goodwill how an acquisition is discussed on slides 5–6 could
significantly more effective performing, but that does not provide information that
at a reasonable cost to mean that the test has failed. investors need about the
companies. • When performed well, the performance of acquisitions.
• Shielding cannot be test ensures that the carrying
eliminated because goodwill amount of the CGU as a
has to be tested for whole is recoverable.
impairment with other
assets.
B Amortisation of Goodwill vs Impairment-only 11
There is no compelling
evidence that amortisation Retain the impairment-
would significantly improve only approach
financial reporting
Goodwill is different from other assets Some believe that recognising these assets
because it: separately helps explain what the company
• can only be measured indirectly; and has bought in an acquisition. Others think
that the information is of limited use.
• cannot be sold separately.
Objectives
Board’s
Possible changes the Board considered More useful
Reduce cost preliminary view
information
The deadline for comments on the Discussion Paper is 31 December 2020. The deadline
has changed to 31 December 2020 because of the covid-19 pandemic; previously it was 15
September 2020.
For further information on the project and the Discussion Paper please visit
www.ifrs.org/projects/work-plan/goodwill-and-impairment/.
Get involved 17
IFRS Foundation
International Accounting Standards Board
IFRS Foundation
IFRS Foundation