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Recommendations Relating to Issuers:

  • Recommendation 1: Issuers should properly recognise all identifiable intangible assets and provide entity-specific disclosure of the factors that make up the goodwill recognised in a business combination
  • Recommendation 2: Issuers should obtain sufficient evidence to demonstrate that assumptions are reasonable and supportable
  • Recommendation 3: Issuers should ensure the consistency between assumptions used in goodwill impairment tests and non-financial disclosures
  • Recommendation 4: Issuers should clearly disclose impairment tests of goodwill

Recommendations Relating to Audit Committees (or TCWG):

  • Recommendation 5: Audit Committees (or TCWG) should exercise effective governance over goodwill impairment tests by using IOSCO Report on Good Practices for Audit Committees

Recommendations Relating to External Auditors:

  • Recommendation 6: External auditors should challenge management’s assumptions and disclosures
  • Recommendation 7: External auditors should achieve transparency of audit on goodwill through key audit matters (KAM)