As the FASB is doing in the U.S., the International Accounting Standards Board is also exploring whether to reintroduce goodwill amortization. The IASB plans to release a Discussion Paper in early 2020 (February, we hear) for a 180-day comment period to weigh stakeholder interest in amending IFRS 3, Business Combinations and IAS 36, Impairment of Assets.

In conjunction with a recent meeting of the trustees of the IFRS Foundation in New York City, a stakeholder event was held that was jointly organized with the CFA Institute. During that event, the IASB explained that it hopes the feedback on the Discussion Paper will help it arrive at a consensus, according to a report on the event. “Some board members support a reintroduction of goodwill amortization because they believe the existing impairment model is not providing information to the markets on a timely basis,” the report says. “Other board members want to leave the impairment model intact because they believe the model, even with its limitations, still gives investors useful information that holds management accountable for its decisions about acquisitions.”

“There should be an expense somewhere,” said Hans Hoogervorst, IASB chair. “We see time and again that goodwill only gets written off when it’s too late.” Hoogervorst acknowledged that the board’s challenge is to provide investors with the information about acquisitions that they need. Therefore, the board’s project will not only deal with goodwill and how it is treated, but it will also focus on possible new disclosures to help investors assess the subsequent performance of an acquisition.