PwC partners discuss the models for assessing, measuring, and recording nonfinancial asset impairments as companies look to their March 31 reporting.
If you’re unsure about how COVID-19 might impact your financial reporting, you're not alone. In response to the COVID-19 crisis, this podcast is part of a series that will address questions received surrounding the impacts to financial statements. Heather Horn is joined by PwC partner Andreas Ohl to cover common questions and give helpful reminders on an accounting fundamental: nonfinancial asset impairment.
1:10 - Order of impairment testing. Before diving into the specific impairment models, Andreas helps listeners understand the order in which assets should be tested for impairment. He also highlights the differences in testing order for assets that are held and used vs held for sale.
2:48 - Long-lived assets impairment model. The nature of and need for impairment testing varies based on the type of nonfinancial asset being assessed. Andreas walks through the specific models for performing impairment testing.
9:04 - Long-lived assets triggering events. The concept of a triggering event is critical to the nonfinancial asset impairment model - that’s what “sets off” the need for a full quantitative impairment test. Andreas provides some examples of triggering events.
12:24 - Goodwill impairment model. Once listeners understand the long-lived asset impairment model, Andreas explains how it differs from the model for goodwill and indefinite-lived intangible assets.
15:45 - Goodwill triggering events. We close with a discussion on the goodwill impairment model and share examples of potential triggering events for interim impairment testing.
Andreas Ohl is a partner in PwC's National office, where he focuses on mergers and acquisitions under US GAAP and IFRS. Andreas is chairman of the Business Valuation Standards Board at the International Valuation Standards Council, is a member of the working group that authored the AICPA's In-Process R&D guide, and has served as a member of the FASB's Valuation Resource Group.
Heather Horn is PwC's National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.
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