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Recent developments – Goodwill and Impairment Project

  • IFRS - IASB Image

Oct 25, 2018

At its meeting on October 25, 2018, the International Standards Board (the Board) discussed the additional work to be performed in respect of its Goodwill and Impairment project before drafting a discussion paper, and the timing of that work.

The objective of the research project is to consider how to address the following three areas of focus identified in the Post-implementation Review ("the PIR") of IFRS 3 Business Combinations:

  1. whether changes should be made to the existing impairment test for goodwill and other non-current, non-financial assets;
  2. subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortization and impairment approach); and
  3. the extent to which other intangible assets should be separated from goodwill.

At its meeting on October 25, 2018, the Board discussed the additional work to be performed in respect of its Goodwill and Impairment project before drafting a discussion paper, and the timing of that work. The Board did not make any decisions.

Previously at its meeting on July 18, 2018, the Board set three research objectives for the research project. One objective is to explore ways to improve disclosure requirements to enable investors to assess whether a business combination was a good investment decision and whether, after the acquisition, the acquired business is performing as was expected at the time of the acquisition. The Board also tentatively decided that the staff should not perform a complete review of all the disclosure requirements in IFRS 3, Business Combinations and IAS 36, Impairment of Assets. Feedback will be obtained from the Board’s consultative groups in November and December and the staff will report back to the Board at a future meeting.

For further details of these and other developments, refer to the project on the IASB’s website.

For details of the staff’s request for the Board to confirm the further work to be performed to achieve the research objective of identifying better disclosures that would enable investors to assess whether a business combination is a good investment decision and whether the acquired business is performing after the business combination as expected – see the  October 2018 Board Paper.

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