Goodwill Impairment Testing

IAS 36 requires companies to carry out goodwill or intangible asset impairment testing at least once annually.

IAS 36 - Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use). 

What we can help you

With the exception of goodwill and certain intangible assets for which an annual impairment test is required, entities are required to conduct impairment tests where there is an indication of impairment of an asset, and the test may be conducted for a ‘cash-generating unit’ where an asset does not generate cash inflows that are largely independent of those from other assets. We have developed an in-depth understanding of the valuation requirements of IAS 36, as well as the key areas of concern to auditors and regulators. We can assist you in many areas, including:

• Measure of the Value in Use (VIU) and Fair Value Less Cost of Disposal (FVLCD) of CGUs
• Review the significant accounting assumptions and financial projections involved in the impairment assessment
• Explain to the auditor the reasons why different valuation methods are adopted in different situations. In practice, such analyses are often time-consuming and require in-depth knowledge of the industry and valuation, and our services can save clients a great deal of valuable time and cost
• Build a complete set of calculation models for future impairment testing and business valuation