The PIR identified mixed views, from both comment letters and targeted outreach, about the relevance and cost effectiveness of the existing requirements for the initial and subsequent measurement of goodwill. The PIR also identified the need for improvements to impairment testing for goodwill and other non-current, non-financial assets.
Some respondents were concerned that the current impairment model is not effective in identifying impaired performance of areas of the business (cash-generating units) to which goodwill has been allocated. In particular, the reporting of accounting impairments is perceived as slow relative to the related economic impairment.
In February 2015, the Board discussed the issues arising from the PIR of IFRS 3 and decided that more work is needed to address the current requirements for goodwill and impairment. Consequently, the Board added this project to its research programme.