Fair value impairment testing under IFRS: examining Australia's disclosure quality

Tyrone M. Carlin, Nigel Finch, Guy W. Ford

Research output: Contribution to journalArticlepeer-review


This paper examines the use of the fair value approach to impairment testing pursuant to IFRS by a sample of large listed Australian corporations. A mounting body of literature has criticised the theoretical and technical foundations of the IFRS mandated impairment testing process. This paper adds to that literature by examining the quality of impairment testing disclosures of firms that tested for impairment on a fair value basis rather than the more common value in use approach. We find that these firms tended to have greater levels of goodwill, yet exhibited lower rates of impairment recognition. We also document systematic deviations between mandated disclosures relating to impairment testing and those actually produced by firms in our sample.
Original languageEnglish
Pages (from-to)1-25
Number of pages25
JournalFinancial reporting, regulation and governance
Issue number1
Publication statusPublished - 2008


  • fair value
  • impairment
  • goodwill
  • AASB 136
  • earnings management


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