Experts predict more scrutiny on goodwill impairments

BVWireIssue #163-4
April 27, 2016

In the wake of a spike in M&A activity in 2015 and recent stock market declines, experts foresee an increase in scrutiny of goodwill impairments, according to ComplianceWeek. PwC is advising companies to “look hard” at goodwill impairments to see whether the 1Q16 stock market drop resulted in any triggering events. Calcbench, with its XBRL-powered research tool, says goodwill impairments of $250 million each quarter are trending upward. Greg Franceschi (Duff & Phelps) points out that significant amounts of goodwill have been added to company balance sheets as a result of record M&A levels last year. However, he believes it’s a little too early in the year to determine whether those acquisitions were overpayments or are starting to not meet expectations put forth in the deal models.

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