A new paper offers some suggestions for enhancing the goodwill impairment framework in order to improve the information the framework provides. This is the third and final in a series of excellent “perspective papers” from the International Valuation Standards Council (IVSC) that examine this issue. Accounting rule makers are considering changes to the current goodwill impairment model and possibly reverting back to one of amortization. The first IVSC paper concluded that goodwill is not a wasting asset, and the second paper explored the information content of the goodwill impairment test and highlighted reasons for its perceived limitations as a leading indicator. The paper is by Kevin Prall, business valuation technical director, in consultation with the IVSC Business Valuation Board. To download the paper, click here.
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