Examining the decision usefulness of goodwill impairment testing disclosures under IFRS

Tyrone Carlin, Cary Dilernia, Nigel Finch

Research output: Chapter in Book/Report/Conference proceedingConference proceeding contributionpeer-review


The adoption of IFRS based reporting in Australia for all reporting periods commencing I January 2005 onwards resulted in substantial variations to prior accepted reporting practices. One area in which change was particularly profound was in the shift to an impairment testing based regime for goodwill accounting and reporting. The IFRS framework requires substantially greater levels of disclosure about the assumptions brought to bear in sustaining a valuation for goodwill. At face value, this should have resulted in improved transparency and the availability of higher levels of decision useful information. However, a review of disclosures relating to goodwill and its impainnent by a sample of large Australian reporting entities in the first year after the transition to IFRS suggests substantial room for improvement. In particular, required disclosures were frequently omitted, or suggested that the technical requirements of the IFRS goodwill impairment testing process had not been complied with. Consequently, it is concluded that at present, it is in exceptional cases rather than a matter of generality that IFRS compliant disclosures sustain improved insights and support better decision making by financial statement users.
Original languageEnglish
Title of host publicationProgram and proceedings
Subtitle of host publicationNineteenth Asian-Pacific Conference on International Accounting Issues
Place of PublicationKuala Lumpur, Malaysia
PublisherThe University of Malaya and California State University
Number of pages11
Publication statusPublished - 2007
EventAsian-Pacific Conference on International Accounting Issues (19th : 2007) - Kuala Lumpur, Malaysia
Duration: 11 Nov 200714 Nov 2007


ConferenceAsian-Pacific Conference on International Accounting Issues (19th : 2007)
CityKuala Lumpur, Malaysia


  • goodwill
  • financial reporting
  • creative accounting
  • impairment accounting


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