IMPAIRMENT TEST
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
