Goodwill and impairment


This project results from the post-implementation review of IFRS 3 Business Combinations.

The feedback on the post-implementation review had revealed that impairment of goodwill is not always recognised in a timely fashion and that disclosures required by IFRSs do not provide enough information to understand whether the acquired business is performing as was expected at the time of the acquisition. There were also comments that the impairment test required for goodwill under IAS 36 Impairment of Assets is costly and complex. There were also calls to reintroduce amortisation of good will.

In February 2015, to address the concerns mentioned and investigate possible improvements to IFRS 3 Business Combinations and IAS 36, the IASB added to its research agenda the following areas of focus, which later evolved into the goodwill and impairment project:

  • improving the impairment test in IAS 36;
  • subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortisation and impairment approach); and
  • identification and measurement of intangible assets acquired in a business combination.

Discussion of the project began in September 2015 and a discussion paper was published on 19 March 2020.


Current status of the project

In February 2015, the IASB added the components of this project to its research agenda and discussions began in September 2015. A discussion paper was published on 19 March 2020. On 17 April 2020, the comment period on the discussion paper was extended until 31 December 2020.


Project milestones

Date Development Comments
February 2015 Added to the IASB's agenda
September 2015 Project first discussed
19 March 2020 DP/2020/1 Business Combinations — Disclosures, Goodwill and Impairment published Comments requested by 15 September 2020
17 April 2020 Comment period on the discussion paper extended until 31 December 2020

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