Goodwill and Impairment - IASB

Date recorded:

At its meeting on January 25, 2018, the IASB discussed whether it can simplify the value in use calculation without making the impairment test in IAS 36, Impairment of Assets less robust. The Board tentatively decided to consider removing the requirement for an entity to exclude from the value in use calculation cash flows resulting from a future restructuring or a future enhancement.

The Board also tentatively decided to consider removing the explicit requirement to use pre-tax inputs to calculate value in use and to disclose the pre-tax discount rates used.  Instead, an entity would be required: (i) to use internally consistent assumptions about cash flows and discount rates; and (ii) to disclose the discount rate(s) actually used.

At future meetings, the Board will: (i) discuss whether to consider subsuming some intangible assets within goodwill acquired in a business combination; and (ii) decide whether the next stage in the project should be a discussion paper or an exposure draft.

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