The UKEB has today 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 UKEB is delighted to be invited to present its report at the IASB’s Accounting Standards Advisory Forum (ASAF) on 29 September 2022. You can register to watch the session here.
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.