The Authority participates in expressing its view on the International Accounting Standards Board’s draft amendment to IFRS 36 regarding disclosures, goodwill and impairment measurement.

The International Accounting Standards Board published a draft amendment to IFRS (3) and IAS (36) regarding disclosures, goodwill and impairment measurement. The Authority, represented by its Accounting Standards Board, studied the draft amendment and saw the appropriateness of the required disclosures regarding strategic business combinations. However, it suggested to the International Board to reconsider the available exemptions from disclosure, as they could lead to inconsistency in application between different entities. In addition, the Authority indicated in its comment on the draft the appropriateness of expanding the limits of qualitative characteristics to determine what can be considered strategic business combinations. With regard to goodwill and measuring the impairment in its value, the Authority considered the proposed amendments appropriate with regard to clarifying how to allocate goodwill to cash-generating units and disclosing the sectors that include those units. However, the Authority considered that allowing the inclusion of future cash flows related to restructuring that the entity has not undertaken in calculating the value in use for the purposes of determining the impairment in value may lead to increasing the level of management optimism regarding the asset and delaying the calculation of the impairment in value. The Authority’s detailed view can be viewed by clicking here.