Impairment is one of ASIC’s key areas of focus again for 30 June 2019, so we’ve summarised the resources and tools available to assist you in preparing your analysis.

Summary of key impairment issues

A great summary of impairment concepts is available in the Chartered Accountants Audit Committee Guide which was co-authored by Leadenhall. It covers what impairment means, why it is important and raises questions directors should ask in relation to the methodology used, projected cash flows and disclosures. The guide is designed to provide useful information for directors for year-end reporting in understanding some of the more detailed requirements of asset impairment testing.

Free tools

Did you know that Leadenhall offers a range of free tools and resources? We’re pleased to provide the following models to assist with your impairment preparation.

• Impairment model – in addition to our standard DCF valuation model, we’ve prepared a free rate impairment-specific DCF model which you can use for your analysis, available here.
• Discount rate model – we’ve prepared a free discount rate model which allows you to correctly build-up a discount rate from first principles which is available here.

To complete the discount rate model, you’ll need our latest assessment of market risk premium (MRP). You can find the latest one here, under ‘Articles & Publications.’

Economic snapshots

Our international affiliates at VRG have just released the Q2 2019 economic snapshots for 16 countries which you can leverage for estimating long-term macroeconomic assumptions for these regions such as inflation, GDP growth, etc. Coverage includes: United States, Argentina, Australia, Brazil, Canada, China, Colombia, France, Germany, India, Italy, Japan, Mexico, Spain, Switzerland and United Kingdom. Click here to view the snapshots.

Training

You can access a range of training on impairment and other related topics via the Chartered Accountants website, including an impairment fundamental series (via recorded webinar) presented by Simon Dalgarno (Leadenhall) and Kevin Frohbus (BDO). Click here to access the training or learn more.

Questions

Whilst you can access a range of free tools and resources, please remember we’re always here if you have a question or need a hand. Click here to contact us for further support.