“Amortisation over a straight-line period tells you nothing. Impairment … says that something you acquired didn’t turn out, and users of financial statements should ask more questions,” Sandra Peters, head of financial reporting at the CFA Institute, said at last month’s Calcbench webinar.

The webinar, What’s New in Goodwill, is available free on YouTube and featured Peters along with VRC co-CEO PJ Patel and Calcbench CEO Pranav Ghai. Peters was previewing CFAI’s current survey of members, which finds broad support for the traditional testing of goodwill for impairment—and skepticism about U.S. FASB efforts to change to straight-line amortisation (other international regulators appear to be moving away from the amortisation idea, so both preparers and users of financial statements could end up with separate versions).

The CFAI and Peters, of course, are concerned about the investment professionals and the information they derive (or fail to derive) from listed company financial statements. She says that, in practice, many CFAs perform their own impairment analysis with much less information than the companies have, suggesting it is valuable to them and may not be as onerous and costly as proponents of amortisation suggest.

Business valuers at the big firms who conduct impairment tests know how difficult they are, but it is the one part of the audit process that requires pushback on optimistic forecasts for acquisitions that may be underperforming.