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Goodwill and Impairment - IASB Research Project


Project History

The objective of this IASB research project is to consider how to address the following three areas of focus identified in the Post-implementation Review ('the PIR') of IFRS 3 Business Combinations:

  1. whether changes should be made to the existing impairment test for goodwill and other non-current, non-financial assets

  2. subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortisation and impairment approach)

  3. the extent to which other intangible assets should be separated from goodwill

EFRAG Proactive project: Goodwill and Impairment

In 2014, the Accounting Standards Board of Japan (ASBJ), the EFRAG and the Organismo Italiano di Contabilità (OIC) issued a discussion paper authored by a Research Group on the subsequent accounting for goodwill. The discussion paper was developed in the context of the IASB's PIR and addressed:

  1. whether the reintroduction of goodwill amortisation would be appropriate, and if so, would the systematic amortisation of goodwill on a straight-line basis provide an appropriate balance between faithful representation and cost

  2. the impairment of goodwill, including noting that the reintroduction of amortisation would not replace the need for a robust impairment model that is rigorously applied with appropriate disclosure requirements; the two approaches were viewed as complementary and not mutually exclusive

  3. the issues associated with separating intangible assets from goodwill on initial recognition

Following the analysis of the feedback to the discussion paper, EFRAG and its partners decided to continue the project with the objective of making practical suggestions to solve the issues raised in relation to amortisation and impairment.

Further information may be found here​


IASB developments

At its meetings in October and November 2015, the IASB discussed the following topics:

  1. subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortisation and impairment approach)

  2. improving the impairment test in IAS 36

  3. identification and measurement of intangible assets in a business combination

In 2016, the IASB regularly discussed the above three topics covered by the project. 


Current status

At its meeting in March 2017, the IASB discussed the status of the project and decided to ask the IASB staff to present proposals to the IASB on:

  1. simplifying the impairment testing model in IAS 36 Impairment of assets  

  2. improving the effectiveness of the impairment testing model, which will also focus on additional disclosures

  3. identifying intangible assets in a business combination

At its meeting in July 2017, the IASB considered the feedback from the Capital Markets Advisory Committee, the Global Preparers Forum and the Accounting Standards Advisory Forum and discussed in the light of the feedback on:

  1. possible relief from the mandatory annual quantitative impairment testing of goodwill required by IAS 36 Impairment of Assets 

  2. possible improvements to disclosures in financial statements about goodwill    

 At its meeting in  October 2017, the IASB discussed on:

  1. whether there are ways to improve the effectiveness of the imapirment test in IAS 36 Impairment of Assets

  2. whether there are ways to simplify that impairment test whithout reducing the information provided to users of financial statements 

  3.  whether to require additional disclosures about goodwill and impairment that would improve the quality of information provided to users.

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