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EFRAG issues feedback statement on the questionnaire on subsequent measurement of goodwill

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

07 Jun 2013

In July 2012, the European Financial Reporting Advisory Group (EFRAG) and the Italian standard setter Organismo Italiano di Contabilita (OIC) issued a questionnaire on impairment requirements for goodwill. The results of the survey, which are intended as input to the IASB's post-implementation review of IFRS 3 'Business Combinations', were made available today in the form of a feedback statement.

EFRAG comes to the conclusion that the results of the study indicate that information on goodwill is used in many different manners and that there are many different views on how to measure goodwill after initial recognition.

These results are not surprising considering that respondents already had different opinions on what goodwill normally consisted of or thought the calculation of it unverifiable. This uncertainty led some respondents to claim that they did not use the information on goodwill presented in financial statements at all, some said they used the goodwill figure differently in their analysis depending on what they thought goodwill included, some use specific criteria for assessing the overall reliability of the financial information on goodwill, and some consider other information together with reported goodwill figures or correct the figures.

Therefore, the survey seems to suggest that not only the subsequent measurement of goodwill would need further discussion and several respondents suggested alternative methods for accounting for goodwill altogether.

Please click for access to the feedback statement on the EFRAG website.

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