The UKEB has published its research report Subsequent Measurement of Goodwill: a Hybrid Model. The report contributes to the ongoing international debate on the subsequent measurement of goodwill.
The report explores the effects of the application of the impairment-only model for UK IFRS reporters from 2005 to 2021. It finds that:
The report explores the practical implications of a potential transition to a hybrid model for subsequent measurement of goodwill. Under a hybrid model, an annual amortisation charge would be combined with indicator-based impairment testing and disclosures to increase management accountability for acquisitions.
The report presents the results of a survey, field test and stakeholder outreach which explored the implications of a transition to a hybrid model for subsequent measurement of goodwill. 23 companies representing 17% of the FTSE 350 by market capitalisation completed the survey, and 9 UK IFRS preparers took part in the field test. 33 users of accounts, 20 audit firms, and 5 academics took part in roundtables and meetings to explore the field test output.
The research indicates that a transition to a hybrid model would be practically feasible as:
Thank you to everyone who contributed to the research.