Knowing (and acknowledging) that this will almost certainly be a foray into the game of opinions, IASB has chosen some key areas to look at.Ĭonsideration has been given to subsume some of the intangible assets into goodwill rather than recognise them separately. So, the IASB stands in the unenviable position of taking this forward and coming up with progress that is cost-effective and provides useful information for the users.
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Conversely (and as this is goodwill, there are always going to be strongly opposing views), some users support recognising these intangible assets separately because this provides an insight on why an acquisition was made and about the primary assets/value drivers of the acquiree.
Some users commented that valuations can often involve such subjectivity that they do not provide any useful information, commonly citing customer relationship intangible assets and brands as problematic areas.
The PIR identified concerns that, for some intangible assets, the requirement to include them at fair value is costly (because of the need to use valuation specialists), complex and time consuming. The IASB has issued two staff papers to demonstrate progress, focusing on two main areas. This is one of the research projects that the IASB will look to develop in 2017. Following the post-implementation review (PIR) of the converged IFRS 3, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) in the US both have projects focusing on goodwill and intangible assets recognised in a business combination. Ever since the introduction of IFRS 3, Business Combinations, it has been a source of constant debate and opinion. One such topic is the accounting treatment for goodwill. They may not get the airtime of some of the more high-profile business controversies, but they cause great discussion amongst those of us who are unashamed to have favourite accounting standards. Whilst accounting standards may not lead to the same level of heated debate as the relative merits of José Mourinho versus Pep Guardiola, there are certain topics that can get the juices flowing. It can be simple and enjoyable, but it really is a game of opinions. Yet for a simple game, football generates more debate and ideas than many other topics in society. Twenty-two men chase a ball for 90 minutes and in the end, the Germans win.’ The English football pundit Gary Lineker once said, ‘Football is a simple game. This article was first published in the February 2017 international edition of Accounting and Business magazine. We'd suggest that you use this as a guide when allocating yourself CPD units. One hour of learning equates to one unit of CPD. Studying this technical article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs.
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