Goodwill and Impairment – IASB
At its meeting on July 18, 2018, the Board continued its discussions on this research project. The Board discussed the objectives of its follow up work in the light of findings from the research. In particular, the Board tentatively decided: (i) not to pursue the objective of removing the differences between accounting requirements for internally generated intangible assets and those for intangible assets acquired in a business combination; (ii) to explore whether disclosures could be improved to enable investors to assess more effectively whether a business combination was a good investment decision and whether the acquired business is performing after the acquisition as was expected at the time of the acquisition; (iii) to pursue improving the calculation of value in use by removing from IAS 36 Impairment of Assets: (a) the restriction that excludes from the calculation cash flows that are expected to result from a future restructuring or from a future enhancement; and (b) the requirement to use pre tax inputs in the calculation; (iv) to retain the existing model for impairment testing in IAS 36, instead of changing it to focus on assessing whether the carrying amount of acquired goodwill is recoverable. The Board also tentatively decided to issue a discussion paper as the research project’s next step. (The Board noted that this decision would not preclude it from issuing an exposure draft on, for example, targeted improvements to the value in use calculation.)
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