This publication addresses considerations related to adopting and performing a qualitative assessment of goodwill impairment in accordance with FASB ASU 2011-08, “Testing Goodwill for Impairment.” Key topics discussed include: © 2020 EYGM Limited. They follow generally accepted accounting principles (GAAP) in order to determine how and when to calculate asset impairment. Impairment Testing IAS 36 / ASC 350 ... Corporate income tax rate 18.00% n Corporate income tax rate (EY Worldwide Corporate Tax Guide) WACC (rounded) 8.2% = g x l + k x m x (1 - n) 1 Team overview 2 Introduction 3 Cost of equity 4 Cost of debt 5 Further parameters. He also highlights the differences in testing order for assets that are held and used vs held for sale. Limited access to cash flow projections of the investee may also present challenges for impairment testing at the investment level. ; Steps for Goodwill Impairment Test. ... components per industry and includes also relevant macro-economic data used in business and other valuations such as impairment tests or purchase price allocations. +48 505 171 636 aleksandra.trych@pl.ey.com Module 1: 12, 19, 26 Oct 2020 Module 2: 2, 16, 23 Nov 2020 Module 3: 3, 14, 21 Dec 2020 Module 4: 22 Feb 2020 & 9, 22 Mar 2021 Study wherever you are in the world! The KPMG Guide: Improvements to Financial Reporting Standards incorporating FRSs 101, 108, 116, 117 and 124 i. Management should take care to ensure that all requirements are understood and appropriately applied Impairment tests should be conducted by comparing ‘apples with apples’, i.e. 1:10 - Order of impairment testing. Impairment Hedge accounting Other requirements Further resources. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. As a result of the COVID-19 pandemic, there may be various accounting and financial reporting considerations specific to the application of the US GAAP and IFRS lease accounting requirements, including those introduced by the FASB’s new lease accounting standard (ASC 842). 1 Sep 2020 PDF. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. pose of this documentPur. The two common methods are as below: #1 – Income Approach – Estimated future cash flows are discounted to a single current value. As data personalizes medtech, how will you serve tomorrow’s consumer? 2011-08, "Testing Goodwill for Impairment." What is Impairment? IFRS 9 is effective for annual periods beginning on Welcome to EY.com. IAS 36: Impairment of assets Companies with substantial intangible assets may find themselves under the impairment disclosure spotlight – and facing significant charges – as the financial crisis continues. The impairment of a fixed asset can be described as an abrupt decrease in fair value Fair Value Fair value refers to the actual value of an asset - a product, stock, or security - that is agreed upon by both the seller and the buyer. The two common methods are as below: #1 – Income Approach – Estimated future cash flows are discounted to a single current value. Financial statement presentation. Refer to Appendix E of the publication for a summary of the updates. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Right-Of-Use (ROU) assets are non-financial assets in the scope of IAS 36. Fully updated in October 2020. To our clients and other friends . EY is a global leader in assurance, consulting, strategy and transactions, and tax services. A comprehensive guide Intangibles — Goodwill and other . He has co-authored the 12-day EY Diploma in IFRS programme. It … Your step-by-step guide to EPS calculations and application issues under IFRS Standards. Financial reporting developments A comprehensive guide Impairment or disposal of longlived All Rights Reserved. Goodwill is being tested for impairment in the annual mandatory impairment testing, without there being an indication of impairment in the underlying CGUs. This publication addresses considerations related to adopting and performing a qualitative assessment of goodwill impairment in accordance with FASB Accounting Standards Update No. [IAS 36.2, 4] Aircraft are reviewed for impairment whenever events or changes in circumstance indicate that the carrying value may not be recoverable 1.If reductions in market values, driven for example by Covid-19, indicate a decline in value greater than would be expected as a result of normal use this would be an indicator of impairment. All Rights Reserved. Subject AccountingLink. The following are the key changes: GOODWILL IMPAIRMENT (ASC 350-20) MADE SIMPLE Pre-2017 2017 Update Step 2 measures a goodwill impairment loss by compar-ing the implied fair value of a reporting unit’s goodwill provides a step-by-step guide to performing an impairment assessment, and when required, testing for and/or recording or reversing impairment in accordance with IAS 36 highlights interpretative and practical application issues that arise when performing these steps offers insights on best practices to address these issues. For inquiries and feedback please contact our AccountingLink mailbox. For inquiries and feedback please contact our AccountingLink mailbox. 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