On 31 Dec 2020 the UK Shareholders Association and ShareSoc submitted a joint response to The IASB’s Discussion Paper on Business Combinations – Disclosures, Goodwill and Impairment (DP/2020/1)
Our key messages are:
- We support the Board’s overall objective of enhancing disclosure on acquisitions and their subsequent performance. Current disclosure is extremely unsatisfactory. As a result we agree with the Board’s preliminary views set out in paragraph IN9 with the modifications and qualifications set out in this letter. We would also argue that there is a need to keep cumulative and separate goodwill and impairment disclosures for each acquisition.
- We do not regard testing goodwill for impairment as either robust or desirable.
- We concur with the Board’s opposition to the reintroduction of goodwill amortisation.
- We do not see any need to require companies to report total equity excluding goodwill as this number is easy to derive if required.
- We regard separate classifications of all intangibles as useful and, as a minimum, we would like to see separate disclosure of internally generated intangible assets and those created during the acquisition consolidation process.
The full response can be read here:
The Discussion paper can be read here https://cdn.ifrs.org/-/media/project/goodwill-and-impairment/goodwill-and-impairment-dp-march-2020.pdf