Business Combinations Disclosures, Goodwill and Impairment

Timeline 

The IASB published its Discussion Paper Business Combinations – Disclosures, Goodwill and Impairment in March 2020.  The IASB’s comment deadline was 31 December 2020

Background

The Discussion Paper follows the post-implementation review of IFRS 3 Business Combinations. The IASB’s project objectives are:

  • to provide better information on acquisitions to investors
  • to ensure timely recognition of impairments
  • to make the impairment test less costly

Contact:

UKEndorsementBoard@endorsement-board.uk

Key IASB Proposals

  1. Maintain the impairment-only model and do not develop proposals to reintroduce amortisation
  2. Remove the requirement for an annual quantitative impairment test and require a quantitative test only when there is an indicator of impairment
  3. Reduce the cost and complexity of the impairment calculation through targeted simplifications
  4. Disclose management’s strategic rationale, objectives, metrics and expected synergies for acquisitions
  5. Present total equity excluding goodwill on the balance sheet, to highlight the unique nature of goodwill

Outreach

Outreach activity on this project included roundtables with users and preparers, and the opportunity to comment on our draft comment letter

Title
Date
Size
Document type
29 January 2021
654kB
PDFinsert_drive_file
15 December 2020
66kB
Wordinsert_drive_file
15 December 2020
518kB
PDFinsert_drive_file


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