Based on a review of SEC quarterly reports, PwC shares observations on impairments triggered in Q1, and what it may mean for Q2.
As companies look ahead to their Q2 reports, what lessons can be learned about impairments from Q1? Heather Horn is joined by PwC partners to share trends observed in impairments recorded in March and April.
1:05 - Overview. We begin with a discussion of the inherent challenges in assessing impairment in the current environment.
3:47 - Q1 trends. We then dive into the analysis, highlighting key themes and whether there are any indications of more triggering events and impairments at the end of Q2.
11:16 - Sector observations. We take a look at the data from a sector perspective. We examine the differences between industries that were immediately impacted and the companies that may just now be feeling the impact of the downturn.
16:00 - Triggering events. The most common triggering events related to declining cash flows and restructurings. Andreas walks us through specific examples.
23:46 - Key takeaways. We close by discussing some of the factors companies need to be thinking about as they look ahead to Q2 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.
John Benedetti is a Partner in the Capital Markets and Accounting Advisory practice at PwC. John advises large US and international companies in the accounting for complex transactions and the implications of financial and accounting structuring. His deep knowledge of US GAAP and IFRS financial reporting rules allows him to support clients through these challenging endeavors.
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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