The IVSC has published the third and final paper in its series looking at the subject of goodwill amortisation.  The third paper looks back over the core themes presented earlier in the series and looks in more detail at the opportunities for enhancing the goodwill impairment framework.

The three part 'Perspectives' series has sought to foster debate and discussion on the subject of how to treat goodwill in the accounting process, with the goal of aiding capital markets by informing financial statement preparers, reviewers, and users. It comes at a time when standard setters have begun to explore potential changes to goodwill accounting. 

In the first article, Is Goodwill a Wasting Asset?, the IVSC examined whether goodwill is economically a wasting asset, and if so, if the life and implicit decline in value can be reasonably estimated and supported.  In paper two, Information Value of the Current Impairment Test: Leading or Lagging Indicator?, the IVSC explored the information content of the goodwill impairment test and highlighted reasons for its perceived limitations as a leading indicator.

In this paper, the third and final part in the series, we offer some suggestions for enhancing the goodwill impairment framework in order to improve the information content.