Potential approaches to goodwill measurement under IFRS – have your say
By Anne Adrain, Head of Sustainability and Reporting
17 November 2021
Call out for responses to a survey from the UK Endorsement Board seeking views on the subsequent measurement of goodwill under IFRS Standards.
The UK Endorsement Board is seeking input on the practical implications of potential changes to the subsequent measurement of goodwill under IFRS Standards. Your input will help the UK Endorsement Board influence and inform the International Accounting Standards Board (IASB)’s re-deliberations on its proposals in relation to subsequent measurement of goodwill.
The project will provide UK-specific information to the IASB during its re-deliberations on its Discussion Paper 2020/1 Business Combinations: Disclosures, Goodwill and Impairment.
In the Discussion Paper, the IASB supported retaining the impairment-only model for the subsequent measurement of goodwill. The UK Endorsement Board’s response advocated a hybrid model for the subsequent measurement of goodwill. In the hybrid model, an annual amortisation charge would be supported by impairment testing.
The project will explore:
- How a hybrid model for subsequent measurement of goodwill, featuring an annual amortisation charge supported by impairment testing, can provide information that is useful for users.
- How transitioning to such a hybrid model might affect the financial position of a group or company, including its impact on debt covenants and legal and regulatory requirements.
- Potential approaches to estimating the useful life of goodwill for amortisation purposes.
- Transitional arrangements and cost implications.
The UK Endorsement Board invites UK IFRS reporters and their lenders to complete a short survey to contribute views on the practical implications of this potential approach. Your input is extremely valuable and will inform the development of financial reporting.
The survey takes approximately 15 minutes to complete and is open until 26 November 2021.
Responses will be anonymised.
