Publication of final comment letter on the IASB's project Discussion Paper Business Combinations Disclosures, Goodwill and Impairment

Date: 03 February 2021

UKEB secretariat's response to IASB’s DP/2020/1 Business Combinations Disclosures, Goodwill and Impairment published

The UK Endorsement Board secretariat's response to the IASB's DP/2020/1 Business Combinations Disclosures, Goodwill and Impairment has been published.

The response:

  • Proposes a mixed model for accounting for goodwill, in which an annual amortisation charge is supported by indicator-based impairment testing.
  • Suggests possible methods for establishing the useful life of goodwill in the amortisation calculation.
  • Supports moving to an indicator-only impairment model for goodwill only if -amortisation is reintroduced.
  • Seeks further stakeholder input on anticipated cost savings of moving to an indicator-only impairment test for goodwill.
  • Supports IASB's proposed simplifications to the impairment test and makes additional recommendations to reduce risks of shielding and management optimism.
  • Supports the principle of improved disclosures on acquisitions but recommends IASB undertake illustrative examples and field-testing. 

Find response here

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