IMPAIRMENT TESTS

IMPAIRMENT TESTS

Client needs

  • Identify and value the assets of a group in order to estimate any impairment losses to be recognised, in accordance with the relevant accounting standards (IFRSs, French regulation 99-02)

Our strengths

  • Experience of IFRSs
  • Valuation experience
  • Experience in listed companies’ regulated financial reporting (AMF regulations)
  • Internal competence centres in regulated financial reporting/accounting standards and financial valuation

Solutions / services

  • Implementation and documentation of impairment tests for financial statements
  • Critical review of testing performed by the finance department
  • Preparation of sensitivity tests

Approach / methodology

  • Meetings with management to:
    a. gain insight into the activities and strategy of the business,
    b. understand how the business is organised (cash-generating units or CGUs)
    c. identify the CGUs to be tested
  • Identify or validate assets or CGUs to be tested
  • Understand market threats and opportunities (products, revenues, costs) and challenge the business plan
  • Determine and validate the discount rates adopted
  • Carry out and present impairment test sensitivity analyses

Sample assignments

  • Drafting of documentation concerning IFRS impairment tests on behalf of a group transitioning to IFRSs
  • Drafting of a impairment test sensitivity analysis report for a listed company