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Deloitte comment letter on the IASB’s discussion paper on goodwill

Published on: Dec 21, 2020

We have published our comment letter on the IASB’s discussion paper DP/2020/1 'Business Combinations — Disclosures, Goodwill and Impairment', which was published by the IASB on March 19, 2020.

In our response to the discussion paper, we support the Board’s initiative to assess whether information provided to investors on business combinations can be improved, including by setting clearer disclosure objectives. However, we are not convinced that the proposals in the discussion paper would result in disclosures that provide more useful information to users of the financial statements. We believe that additional work is required to understand more precisely what additional information is needed by investors and why it is needed, and what information is currently prepared by management to monitor the impact of business combinations.

Also, we do not support the preliminary view of the Board not to reintroduce amortization of goodwill. Whilst we continue to recognize the conceptual merits of the impairment-only model, we note that there continues to be a perception that too little impairment is recognized too late. Finally, without the reintroduction of goodwill amortization, we strongly disagree with the proposal to remove the requirement to perform a quantitative impairment test every year.

Download the full comment letter below.

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