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Companies reporting under UK GAAP, IFRS or US GAAP are all required to undertake regular impairment reviews for intangible assets, particularly those with indefinite lives, and goodwill reported on their balance sheets. Where an goodwill impairment review or intangible asset impairment review indicates a current value lower than that reported on the balance sheet, this normally results in a write down with a corresponding charge to profit and, if material, a detailed explanation of the reasons for the write down in the published accounts..

We can undertake goodwill impairment reviews or devise a process for companies to carry out impairment reviews internally. We can advise on the precise requirements and timing for such impairment reviews under the appropriate accounting standards. We can also advise on strategy to avoid or minimise asset write downs and maintenance of asset value, for instance recommending programmes to reinvigorate tired and under-achieving brands. In the case of goodwill, during an impairment review we can advise on the allocation of purchased goodwill into reporting units (US GAAP) or cash generating units (IFRS) to minimise the risk of future impairment..

Our methodology for goodwill and intangible asset impairment reviews is based on suitably defined forecasts of future cash flows for the assets and the application of appropriate discount rates to derive a net present value which can be compared with the book values of the assets..

If you have any questions, or would like help with your goodwill impairment review, please call us on + 44 (0)20 7089 9236 or send us an email.