IASB proposals for measuring goodwill impairment

When is the deadline for comments on the Goodwill - Disclosure and Impairment discussion paper?

September 2020

September 2021

December 2020

June 2021

Which of these is an issue relating to the current situation surrounding goodwill impairment?

Impairment is reversed too soon

None of these

Impairment is recognised 'too little, too late'

Impairment calculations are often not disclosed to users

Which, if any, of the following statements are reasons for concerns over the delay in recognising impairment losses? Reason 1 - Management optimism in estimates made, or Reason 2 - Shielding effect of a cash-generating unit

Neither reason

Both reasons

Reason 2 only

Reason 1 only

Which of these has NOT been looked at in the IASB research surrounding goodwill impairment?

Improving the impairment calculation

Re-introducing the annual amortisation of goodwill

Simplifying the impairment test

Clarifying the situations where impairment reversal occurs

What is the current recommendation of the IASB in relation to improving the impairment test?

It is not feasible to improve the current test at a reasonable cost

A calculation of the shielding effect should be made and disclosed

A reduction in the use of fair values is required

The pre-acquisition headroom should be adjusted for

What is the current proposal of the IASB relating to the amortisation of goodwill?

Entities will be given the choice of amortisation or annual impairment reviews

A small majority recommend the reintroduction of amortisation

A small majority recommend that amortisation is not reintroduced

Amortisation will be reintroduced, but only in limited cases

What is the current proposal of the IASB in relation to simplifying the impairment test?

The calculations should consider the headroom

Impairment reviews should now be held every three years

Removing the need for an annual impairment review

No changes are proposed

Which, if any, of the following statements are true? Statement 1 - An amortisation approach would lead to goodwill eventually being removed from the balance sheet of entities, or Statement 2 - Supporters of amortisation approach propose this alongside impairment tests

Both statements are correct

Statement 2 only is correct

Neither statement is correct

Statement 1 only is correct

Which of the following items does not currently need an annual impairment review?

An intangible asset with an indefinite life

An intangible asset with a life of ten years

An intangible asset not yet ready for use

Goodwill

Which, if any, of the following statements is correct? Statement 1 - The IASB acknowledge that removing the need for an annual impairment review could make the impairment test marginally less robust, or Statement 2 - The new impairment rules will be effective for accounting periods beginning on or after 1 January 2021

Both statements are correct

Statement 2 only is correct

Neither statement is correct

Statement 1 only is correct

IASB proposals for measuring goodwill impairment

When is the deadline for comments on the Goodwill - Disclosure and Impairment discussion paper?

Which of these is an issue relating to the current situation surrounding goodwill impairment?

Which, if any, of the following statements are reasons for concerns over the delay in recognising impairment losses? Reason 1 - Management optimism in estimates made, or Reason 2 - Shielding effect of a cash-generating unit

Which of these has NOT been looked at in the IASB research surrounding goodwill impairment?

What is the current recommendation of the IASB in relation to improving the impairment test?

What is the current proposal of the IASB relating to the amortisation of goodwill?

What is the current proposal of the IASB in relation to simplifying the impairment test?

Which, if any, of the following statements are true? Statement 1 - An amortisation approach would lead to goodwill eventually being removed from the balance sheet of entities, or Statement 2 - Supporters of amortisation approach propose this alongside impairment tests

Which of the following items does not currently need an annual impairment review?

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