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Goodwill and Impairment - IASB

Date recorded:

At its meeting on December 14, 2017, the IASB tentatively decided to consider improving the application of IAS 36 by using the unrecognized headroom (the excess of the recoverable amount over the carrying amount) of a cash‑generating unit (or groups of units) as an additional input in the impairment testing of goodwill.

The Board tentatively decided to consider introducing requirements for the entity to disclose:

  1. each year, information about the headroom in a cash-generating unit (or groups of units) to which goodwill is allocated for impairment testing;
  2. a breakdown of goodwill by past business combination, explaining why the carrying amount of goodwill is recoverable; and
  3. the reasons for paying a premium that exceeds the value of the net identifiable assets acquired in a business combination, key assumptions or targets supporting the purchase consideration and a comparison of actual performance with those assumptions or targets.

At future meetings, the Board will:

  1. decide whether the output of the project should be a discussion paper or an exposure draft;
  2. discuss whether to consider subsuming some intangible assets within goodwill in a business combination;
  3. continue to discuss whether to simplify the calculation of value in use by removing:
    1. the explicit requirement to use pre‑tax inputs; and
    2. the prohibition on including estimated cash flows from uncommitted future restructuring and from improving or enhancing an asset’s performance.

Review the IASB Update and podcast on the IASB's Web site.

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