Goodwill Research Project

Introduction

The UK Endorsement Board is undertaking a research project to analyse the impact of potential approaches to the subsequent measurement of goodwill under IFRS Standards.

The project will provide UK-specific information to the IASB during its redeliberations 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 UKEB Secretariat’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, 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 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.

Survey 

The UK Endorsement Board invites UK IFRS reporters and their lenders to complete a short survey to contribute views on the practical implications of a potential transition to a hybrid model, including impact on debt covenants and legal and regulatory requirements. Your input is valuable to us 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. 

Survey Icon

The survey can be accessed here

UK Endorsement Board Outreach

If you are interested in taking part in outreach on this project, please email contact@uk-endorsementboard.uk