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Deloitte comment letter on EFRAG's DP regarding the amortisation of goodwill

Published on: 24 Sep 2014

Deloitte Touche Tohmatsu Limited has responded to the European Financial Reporting Advisory Group (EFRAG), the Accounting Standards Board of Japan (ASBJ), and the Organismo Italiano di Contabilità (OIC) Discussion Paper Should Goodwill still not be Amortised? Accounting and Disclosure for Goodwill.

Whilst we recognise the conceptual merits of the current model of non-amortisation coupled with a full annual impairment test, its application imposes significant costs on the preparers of financial statements. Specifically, we continue to see a significant proportion of the resources for preparing and auditing financial statements of many entities devoted to the annual impairment review of both goodwill and indefinite-life intangible assets. Similarly, we are aware of concerns over the costs of identifying and valuing separate intangible assets. We are not convinced that this level of cost is justified by the resulting information provided to users of financial statements.

We encourage the IASB to re-open its deliberations (with global convergence in mind) on these areas of business combination accounting and to re-examine the value of information provided by an annual impairment review of unamortised goodwill and indefinite-life intangible assets.

Download the full comment letter below.

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