FEEDBACK STATEMENT
Responses to the Discussion Paper'Should Goodwill still not be Amortised?
Accounting and Disclosure for Goodwill'

Introduction ........................................................................................................................... 3
Why was this Discussion Paper written? ........................................................................... 3
Responses from constituents ............................................................................................. 3
Purpose and use of this feedback statement ..................................................................... 3
Summary of the responses received .................................................................................. 3
Analysis of responses .......................................................................................................... 5
General comments from respondents ................................................................................ 5
Question 1 .......................................................................................................................... 5
Question 2 .......................................................................................................................... 8
Question 3 ........................................................................................................................ 10
Question 4 ........................................................................................................................ 12
Question 5 ........................................................................................................................ 14

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Introduction
In July 2014 EFRAG and the Standard Setters of Italy (OIC) and Japan (ASBJ), issued a
Discussion Paper, authored by a Research Group, on the accounting and disclosure for
Goodwill: Should Goodwill still not be Amortised. Comments were requested by 30
November 2014.
EFRAG, OIC and the ASBJ are now issuing a feedback statement which describes the maincomments received.

Why was this Discussion Paper written?
In 2013, the International Accounting Standards Board (IASB) embarked on a post
implementation review (PIR) on IFRS 3 Business Combinations and it has become apparent
that there is a common view in Europe, Japan and other areas, that accounting anddisclosure requirements regarding goodwill merit further consideration.
Considering this, EFRAG, OIC and the ASBJ formed a Research Group to carry out the
research on this area. As a first step, the Research Group performed a survey to seek forviews on the usefulness of information resulting from the impairment-only approach, as well
as challenges relating to preparing and auditing the resulting information. As a result, theResearch Group learnt that many constituents questioned the usefulness of the information
resulting from the impairment-only approach. It also found that preparers and auditors areconcerned about the cost and subjectivity of the impairment testing in accordance with IAS
36 Impairment of Assets and whether impairment losses are recognised in a timely manner.
Based on the findings, the Research Group explored possible approaches to remedy theshortcomings. EFRAG, OIC and the ASBJ decided to publish this research outcome in aform of the Discussion Paper (DP). Its objective was to stimulate and progress the debate on
this important subject, before the IASB formally considers a standard-setting initiative. The
views presented in the DP were those of the Research Group only.

Responses from constituents
Twenty-nine comment letters were received in response to the DP. A list of respondents is in
the Appendix to this feedback statement. All comment letters received are available on thewebsite of the Accounting Standard Board of Japan (ASBJ) and European Financial
Reporting Advisory Group (EFRAG).

Purpose and use of this feedback statement
This feedback statement has been prepared as a formal record of the responses received. It
will be used by the ASBJ, EFRAG and OIC as input for any future work on the accounting
and disclosures of goodwill. It summarises the messages received from constituents andnotes any key themes identified.
This feedback statement should be read in conjunction with the DP, which is available on the
ASBJ, EFRAG and OIC’s website.

Summary of the responses received
Reintroduction of goodwill amortisation
Most respondents agreed with the main conclusion of the DP that the impairment-only model
for acquired goodwill did not provide the most appropriate solution for subsequent

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measurement of goodwill. These respondents agreed with the preliminary views of the
Research Group that amortisation of goodwill should be reintroduced, but also pointed
out that there are areas for improvement in the impairment testing. In commenting on thismatter, they referred to various reasons including the fact that amortisation would reasonablyreflect the consumption of the economic resources acquired in the business combination andallocate the costs of acquired goodwill to the periods it was consumed.
Nonetheless, these respondents provided mixed views on whether the IASB should indicate
a maximum amortisation period. Some respondents acknowledged the subjectivity and highlevel of judgement in determining the useful life of goodwill. However, they believed that thelevel of subjectivity and judgement was not higher than that in the impairment test. In general,
respondents who supported the amortisation of goodwill considered that the IASB should
develop guidance to help preparers determining the useful life of the acquired goodwill.
In contrast, a minority of respondents, mostly users, were supportive of the current
impairment-only approach. These respondents explained that the amortisation model was
fairly meaningless and it would not be beneficial to users of financial statements.
Improvements to the guidance and disclosures in IAS 36
Many respondents considered that the impairment-only approach was a challenge in practiceand that there was room to improve the guidance in IAS 36. These respondents identified anumber of difficulties related to the current approach and provided some suggestions onwhat should be improved.
When questioned about whether there was a need to improve disclosure requirements on
impairment tests, respondents provided mixed views. Some considered that there was room
for improvement, while others did not. Nonetheless, respondents emphasised that any
additional disclosure requirements should be considered in the context of overall amount of
disclosure requirements, which are already considered extensive.
In addition, many respondents highlighted that the relevance of impairment testing for
goodwill, and consequently the need for improved guidance and disclosures, would
significantly decrease if the IASB reintroduced amortisation.
Amortisation and separate recognition of intangible assets from goodwill
Many respondents considered that, if the IASB reintroduced amortisation of acquired
goodwill, it should require the same for virtually all intangible assets (including those withindefinite useful lives). They also suggested that the IASB reconsider the requirement torecognise separately intangible assets in business combinations, especially when the IASB
decides to reintroduce the requirement regarding amortisation of acquired goodwill.

Feedback Statement - Discussion Paper 'Should Goodwill still not be Amortised?

4Analysis of responses
General comments from respondents
Many respondents welcomed the DP and supported the efforts of the EFRAG, OIC andASBJ to stimulate the debate on the appropriate accounting treatment of goodwill andrelated disclosures. Some of these respondents would welcome further education andresearch on the pros and cons of the ‘impairment-only’ and ‘amortisation and impairment’approaches.
One respondent encouraged EFRAG, OIC and ASBJ to share the final conclusions of the DP
with the IASB before the upcoming Agenda Consultation of 2015.
Question 1
Do you agree that there should be a requirement to recognise goodwill as an asset andamortise it over subsequent periods? If so, do you support amortisation because:a) goodwill existing at acquisition date is consumed and replaced with internallygenerated goodwill over time, thus it should be allocated to subsequent periods
as part of the cost of acquiring an entity;b) an impairment-only model is not sufficiently reliable due to the large use ofassumptions in the impairment test (future cash flows, terminal growth rate anddiscount rate); orc) amortisation of goodwill, in addition to the impairment test, achieves anappropriate cost-benefit balance.
The feedback received on Question 1 has been grouped into the following categories. These
categories are further described below.
10%

Support goodwill amortisation approach (66%)
Both models should be further considered (24%)
24%

Support impairment-only approach (10%)
66%

Support for amortisation of goodwill
Most respondents supported the preliminary views of the Research Group regarding
reintroduction of goodwill amortisation. Many of these respondents were preparers andbusiness association of preparers.
These respondents considered that the goodwill amortisation model should be reintroduced
because it was preferable both from a conceptual and cost-benefit perspective. Overall, in
their view:

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5• the acquired goodwill would “eventually deteriorate in value” and goodwill amortisation
approach would result in a periodical expense (and not in a potential later one-off
impairment loss). Such an accounting treatment reasonably reflected the consumption of
the economic resource acquired in the business combination and allocated the costs ofacquired goodwill to the periods it is consumed;• goodwill amortisation allows to match the consumption costs with the benefits of thetransaction;• goodwill is consumed and replaced with internally generated goodwill over time. The
goodwill amortisation approach would limit the recognition of internally generated
goodwill;• amortisation of goodwill would be consistent with the treatment of other intangible andtangible assets;• impairment testing is complex and involves significant judgement. Respondents addedthat there were “significant uncertainties and judgements inherent to the impairment-onlymodel” and amortisation can provide sufficient verifiability and reliability of financial
information;• impairments generally were reported untimely and therefore did not provide new
information to markets, that often have already incorporated it into the share price;• amortisation of goodwill would reduce volatility and management discretion;• reporting entities would no longer have an incentive not to allocate consideration to otherintangible assets subject to amortisation;• amortisation of goodwill would be more operational and improve the cost-benefit balance
for reporting entities;• amortisation of goodwill would limit the size of goodwill in relation to total assets; and• the impairment-only approach often “worsens the reported earnings of entities that are
already experiencing losses”, which would result in pro-cyclical effects.
Some of these respondents acknowledged the subjectivity and the difficulties related todetermining the useful life of goodwill. Nonetheless, it was noted that the level of subjectivity
and judgement was not higher than that in the impairment test. Some respondents
considered that there were factors that could help determining the length of the amortisation
period such as:• the period over which the acquirer expects to earn excess return over the theoreticalcase of a standalone business;• the expected payback period;• useful life of a primary identifiable long-lived asset;• economic assumptions that were used to price the transaction; and• type of industry (for example, hi-tech segments have a short life cycle of 3 to 5 years,
while pharma has a longer cycle of 10 to15 years).
One respondent that supported the impairment-only model still noted that there wereconceptual arguments in favour of amortisation and the best solution would be to provide
information on the subsequent performance of the acquiree.

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6Support for the impairment-only model
A number of respondents, mostly users, did not agree with the reintroduction of goodwill
amortisation and considered that the impairment-only approach was more conceptuallyrobust and provided relevant information to users about economic reality and expected future
economic benefits. These respondents argued that writing down goodwill steadily over time,
regardless of how the investment is performing, would lead to “fairly meaningless information”
and an “excessively cautious measure of profitability”. Some respondents also noted that
smaller impairments were less likely to attract the attention of investors to potentially useful
information that impairments might normally convey about future prospects. In addition,
respondents considered that:• most analysts and investors would continue to look at earnings measures excluding
goodwill amortisation (if reintroduced into IFRS);• users would ignore the amortisation amounts and would add them back to profit toderive an "Earnings Before Goodwill" (EBG). This practice was so common that EBG
was a standard field used by the consensus collators such as Thomson Reuters;• amortising goodwill “confused investment with expense”. In many business combinations,a large part of the acquisition-cost was goodwill, which was treated as an investment
and the value of the investments did not necessarily erode over time. The value should
be reassessed periodically and, if necessarily, written down;• impairments were useful for stewardship purposes so that management could beformally held to account for the investments they had made;• there were conceptual deficiencies in amortisation of goodwill since nearly all
acquisitions were based on the intention to continue the acquired activities for anindefinite period;• some items subsumed in goodwill have an indefinite life (e.g. synergies or access to amarket); and• impairment-only approach provided useful information about Return on Invested Capitaland Return on Capital Employed.
Some of these respondents acknowledged that impairment testing required significant
judgement and cost.
Support for further research
One professional organisation explained that its members had mixed views andrecommended further education and research on this topic.
One auditing firm recognised the conceptual merits of the current model, but had concerns
about the cost for preparers. On this basis, this respondent encouraged the IASB to re-open
its deliberations on business combination accounting and re-examine the value relevance of
goodwill impairment.

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Three other respondents believed that the accounting for goodwill was not a precise scienceand could not, at this stage, be limited to a binary choice. Two of these respondents referredto the FASB solution for private companies, which allows the amortisation of goodwill and to
the fact that the FASB is currently analysing the possibility of extending it to publiccompanies. One respondent added that the accounting for goodwill should be reviewed in
the context of the current discussions on the Conceptual Framework, especially within the
IASB’s discussions on prudence. In his view, amortisation plus impairment model was more
prudent approach since it allowed consumption of the goodwill assets over time and reduced
the uncertainty inherent to the impairment tests.
Question 2
Assuming that there was a requirement to amortise goodwill, do you think that the IASB
should:a) indicate what the amortisation period should be?
b) indicate a maximum amortisation period?
c) provide guidance on how entities should assess the amortisation period (forinstance, by referring to the expected payback period or the useful life of the
primary asset)?
d) allow entities to elect the amortisation period that they consider appropriate?
Support for systematic amortisation of goodwill over an estimated useful life
Most respondents broadly agreed with systematic amortisation of goodwill over an estimateduseful life.
Many of those respondents generally agreed with the preliminary views of the ResearchGroup regarding the need of guidance to estimate the useful life of the acquired goodwill,
and considered that the IASB should develop guidance (e.g. factors that entities should take
into account) that would help preparers determining the useful life of the acquired goodwill.
One respondent further detailed that the estimated useful life and amortisation methodshould be reviewed when necessary, with changes accounted for in accordance with IAS 8
Accounting Policies, Accounting Estimates and Errors. One other respondent added that
entities should disclose the useful life of goodwill and how it had been determined.
Goodwill amortisation with an indication of a maximum amortisation period
Many respondents supported a maximum amortisation period. In particular, one respondent
highlighted that “systematic amortisation over estimated useful life, with a maximum period,
provides an appropriate balance between conceptual soundness and operationality at an
acceptable cost”.
However, these respondents provided mixed views on what should be the maximum
amortisation period. Generally speaking, they did not expect goodwill to last more than 10 to
20 years, thus the maximum period should be set between 10 and 20 years. Yet,
respondents provided different views by stating that:• the IASB should establish a rebuttable presumption that the amortisation period should
not exceed 10 years;• the IASB should limit the amortisation period to 15 or 20 years;

Feedback Statement - Discussion Paper 'Should Goodwill still not be Amortised?

8• the IASB should establish the maximum amortisation period between 10 and 20 years;• the IASB should indicate a maximum amortisation period of 20 years with a rebuttablepresumption;• goodwill could have, in some specific cases, an indefinite useful life; and• the IASB should explore the possibility of setting a range, such as 5 to 20 years. An
entity should be required to disclose the judgements and key assumptions used, when it
selects a useful life outside the range.
One other respondent highlighted that the Directive 2013/34 encompassed a maximum
amortisation period for goodwill and encouraged the IASB to consider the US-developmentsin this area as well.
Goodwill amortisation without an indication of a maximum amortisation period
A number of respondents considered that the IASB should allow entities to elect theamortisation period that they consider appropriate, without an indication of a maximum
amortisation period. These respondents noted that:• an acquirer would often pay an amount higher than fair value of the net assets of theacquiree as it expected to receive, over a certain time period, additional earnings andthat the time period that was used to determine the price paid could well be used todetermine the useful life of goodwill;• it was extremely difficult to set a maximum period for the amortisation of goodwill thatwould be relevant in all circumstances and that it was difficult to justify such cap from a
conceptual point of view;• a maximum useful economic life for goodwill would not reflect the economic substancedue to the differences in business models and industries; and• the appropriate period should be based on the nature of the intangible asset or of theinvestment underlying the goodwill.
One respondent considered that there should be a rebuttable presumption that acquired
goodwill has a finite useful life and it should be amortised over this period. Where the entity
could demonstrate on a continual basis that goodwill has an indefinite useful life, or that theuseful life cannot be estimated reliably, the entity should be required to apply the impairmentonly approach as at present.
Goodwill amortisation with an indication of what the amortisation period should be
Only one respondent considered that if the IASB reintroduced the goodwill amortisation
approach, then it should set a fixed amortisation period, which should be very long.

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Question 3
The Discussion Paper suggests the need for improved guidance in a number of areas in
IAS 36. Do you think that the IASB should improve and/or provide additional guidance inrelation to:a) the methods to determine the recoverable amount of the goodwill;b) the application of the value-in-use method;c) the identification of cash-generating units and allocation of goodwill to each unit;
andd) the choice of the discount rate.
If not, please indicate why. Please state any specific suggestions for improvements if
you have.
Support for improved guidance in a number of areas in IAS 36
Many respondents noted that the relevance of impairment testing for goodwill, andconsequently the need for improved guidance and disclosures, would significantly decrease
if the IASB decided to reintroduce the requirement to amortise goodwill.
Nevertheless, many respondents agreed with the preliminary view of the Research Group
that there was room to improve the guidance in IAS 36 Impairment of Assets. These
respondents identified a number of difficulties related to the current impairment-only
approach and provided some suggestions on what should be improved. For instance,
respondents thought that:• the guidance regarding how to determine the recoverable amount of goodwill should be
improved. Some respondents thought that the IASB should:
oreview the relationship between “value in use” and “fair value less cost to sell” inthe context of calculating the recoverable amount of a cash-generating unit towhich goodwill is allocated;oprovide additional guidance in relation to the methods to determine therecoverable amount of goodwill; andoclarify, in case it concludes that the ‘fair value’ of an investment should be basedon the quoted marked price multiplied by the number of shares, that the fair valueof a listed company should not exceed the aggregated value of its individual
shares.

• the guidance on how to apply the value in use should be improved. In particular, some
respondents though that the IASB should:
oallow management to use different valuation techniques, including methods like
Terminal Value, Gordon Growth Model, EVA and multiples;oensure the application of a rigorous discount cash flow model by indicating
reliable sources for the terminal growth rate;oindicate when future investment would improve the asset’s performance (such aninvestment should be excluded from the expected cash flows) or be regarded as
maintenance;

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oprovide additional guidance in relation to the application of the value-in-use
method; andoeither remove the guidance that excludes improvements or enhancements fromfuture cash flow projections in cases where a cash generating unit constitutes abusiness, or clarify that only future cash inflows and outflows related to new linesof businesses should be excluded.

• the guidance regarding identification of cash-generating units and allocation to each unit
should be improved. These respondents thought that:oit was unclear how to apply the requirements of impairment testing in the period
when allocation is not yet completed. It would be useful if an entity would have toclarify the link between the cash generating unit and the reporting unit monitoredinternally;omore guidance was needed on the identification of cash generating units; andoconsidered that the allocation of goodwill to each cash generating unit was one of
the issues that warranted further investigation, particularly when there is a
restructure of the business.

• the guidance regarding the application of discount rates should be improved. These
respondents thought that:othe guidance on discount rates was a recurrent, widespread and difficult issue
that should be improved on a “holistic basis” covering all areas where discounting
is required in IFRS. For example, respondents would like the IASB to discuss theuse of pre or post-tax rates; andothe IASB should consider setting fixed parameters within the Standard.

• consider a number of other aspects when reviewing IAS 36. In particular, it was notedthat:o

IAS 36 did not take into account management’s expectation on how theinvestment will be recovered;oa review of the guidance in IAS 36 should be accompanied by a review of theexisting fair value measurements of acquired assets and liabilities;othe standard could set a simplified approach for assessing permanent losses invalue (e.g. Italian Standard OIC 9); andothe IASB should require an impairment test only when a qualitative assessment
indicates the possibility of an impairment consistent with the requirements of US
GAAP.

Support for current guidance in IAS 36
A few respondents considered that IAS 36 provided sufficient guidance. One respondent
believed that “room should be left for judgement in order to ensure that the performance ofthe test reflects the way in which the management considers the performance of its acquired
businesses and of its CGUs’. One other respondent did not favour the introduction of further
guidance that would require the recoverable amount to be fair value as for listed entities thevalue of the shares is affected by short term market expectations and therefore, may fail tocorrectly represent the actual value of a company.

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Frequency of impairment testing if goodwill amortisation approach was reintroduced
Some respondents considered that an entity should only be required to make impairment
tests whenever there was evidence or indication that an impairment may have occurred(instead of requiring an annual impairment testing).
Some respondents considered that an entity should perform an annual impairment test only
if the amortisation period exceeded ten years, or was outside the range set in the Standard.
Question 4
The Discussion Paper suggests a number of possible new disclosures about impairment
testing for goodwill. Do you think that the IASB should consider improving requirementsto:a) assist users in understanding the robustness of the modelling and the entity’scurrent assumptions;b) provide confirmation of the ‘reasonableness’ of the entity’s past assumptions;andc) assist users in predicting future impairment.
Support for improved disclosures on impairment tests
A number of respondents welcomed the Research Group’s efforts to evaluate possible
improvements to existing disclosures requirements and considered that there was room toimprove. In particular, these respondents noted that:• it was important to first understand the information needs of users in relation to theimpairment test and then to review existing disclosures in IAS 36 and IFRS 3 withrespect to their usefulness;• disclosing the values assigned to, and the sensitivity of, each key assumption could
cause significant commercial harm to the entity;• disclosures should be improved to increase the transparency of the test and achieve a
better understanding of the entity’s assumptions and of the variances with actual results.
One respondent thought that the reconciliation of the total goodwill allocation to the cash
generating units was particularly interesting as it would improve the usefulness of theinformation in cases of modification in the cash generating units, allowed by paragraph
87 of IAS 36;• it would be useful to have disclosures that would assist users in understanding therobustness of the modelling and the entity’s current assumptions;• it would be useful to have disclosures that would provide confirmation of thereasonableness of the entity’s past assumptions;• entities should disclose key performance indicators of each significant acquisition andhow the acquired entity was performing against those indicators in the three years
following the acquisition;• entities should disclose material acquisitions that contributed to the amount of goodwill
on the balance sheet;Feedback Statement - Discussion Paper 'Should Goodwill still not be Amortised?

12• that in most cases goodwill impairments were not predictive but merely confirmed adeterioration in the outlook for a particular business that has already been anticipated in
the market. To make goodwill impairment tests more useful to investors, the outcome of
an impairment test should be disclosed as soon as possible. At a minimum, results of
the annual impairment test should be published with the preliminary full-year results andnot wait until the annual report is published;• entities should explain changes to main assumptions; and• the Standard should include disclosure objectives.
However, a number of respondents believed that the proposal of improving disclosure
requirements should be reconsidered in the context of overall amount of disclosure
requirements, where many constituents identified challenges of disclosure overload. Some
respondents highlighted the importance of a cost-benefit analysis before introducing new
requirements.
One respondent believed that any improvements to the disclosure requirements in IAS 36
should be addressed in the context of the IASB Disclosure Initiative.
No need to improve disclosures
A number of respondents did not consider that there was a strong need for improved
disclosures. These respondents noted that current disclosure requirements in IFRS 3 andIAS 36 were quite extensive and questioned whether users would benefit from even more
disclosures. In particular, respondents:• thought that detailed disclosures about the calculation of recoverable amounts forvarious different cash generating units, including all the assumptions and detailed
information about the WACC, would go far beyond the scope of what should beexternally reported;• did not support disclosures on variances between forecast and actual results, as they
believed that such disclosures would be quite lengthy and burdensome to provide;• did not see the benefit of disclosing an expected period of consuming synergies from abusiness combination (unless a goodwill would be actually amortised over that period);• noted that companies already provided a sensitivity analysis which enabled users todetermine potential future impairments in case of a change in the assumptions on the
future net cash flows or discount rates; and• thought that the cost of additional disclosures would not be justified by the benefit tousers.
One respondent did not see any practical manner in which the IASB could be able toimprove requirements to assist users in predicting future impairments.
Disclosure requirements if the goodwill amortisation model was reintroduced
A number of respondents considered that with the reintroduction of amortisation model,
disclosures requirements would have to be reviewed, particularly when considering that
goodwill impairment would be less critical for the users. One respondent noted that theimplementation of the ‘impairment-only model’ had led to a significant increase of disclosureburden to listed companies. Some respondents believed that with the reintroduction ofamortisation model, the disclosures requirements related to goodwill impairment could be
reduced.

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Question 5
IAS 38 requires that intangible assets with indefinite useful lives are not amortised but
tested for impairment at least annually. Assuming that there was a requirement toamortise the goodwill, do you think that the same requirement should be extended toother intangible assets with indefinite useful lives? In addition, assuming that there wasa requirement to amortise goodwill, do you think that the current requirements ofidentifying intangible assets separately from goodwill should be reconsidered? If so,how?
Amortisation of intangible assets with indefinite useful lives
Many respondents thought that if the IASB would require the amortisation of goodwill, thesame requirements should be applied to other intangible assets with indefinite useful lives.
One respondent noted that goodwill and intangible assets with indefinite useful life weresimilar assets and the boundaries between them were not always clear. One respondentconsidered that it would be reasonable to apply the same approach for goodwill to some but
not all other intangible assets.
In contrast, some respondents did not think that the same requirement should or needed to
be extended to other intangible assets with indefinite useful lives. One respondent believedthat the same arguments against goodwill amortisation also applied to the amortisation ofcertain intangibles, such as brands, trademarks and customers lists, which are only
recognised when an acquisition takes place. This respondent would prefer that difficult-to
define assets and intangibles with an indefinite life, such as brands and customer
relationships, were subsumed into goodwill and subject to impairment testing rather thanperiodic amortisation.
A few respondents acknowledged that there were mixed views on this issue. Therefore, oneof these respondents considered that the accounting treatment of goodwill and intangible
assets with indefinite useful lives needed to be further debated by the IASB. Such debates
should include considerations on whether the same approach is necessary for goodwill andintangible assets with indefinite useful lives.
Separate recognition of intangible assets from goodwill
Many respondents considered that the IASB should reconsider the current requirements on
separate recognition of intangible assets, notably if the IASB reintroduced the amortisation of
goodwill. These respondents identified a number of difficulties related to the current
requirements and provided some suggestions on what should be improved. In general,
respondents were concerned about separately identifying some specific intangible assets,such as customer relationships, customer lists and brands, because:• it was not possible to recognise equivalent internally generated intangibles;• entities incurred in significant costs to obtain these fair values;• impairment tests were highly questionable;• there was no active market for them;• users did not see any advantage in separately recognising such items; and• the calculations/exercise involved in the separation of intangible assets from goodwill
could be complex and highly judgemental and accomplished only for accounting reasons.

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Suggestions made by respondent were, among others, the following:• reporting entities should be allowed to exercise judgement on whether the benefits forusers related to identifying intangible assets separately from goodwill would outweighthe costs for preparers;• the separate recognition of intangible assets from goodwill should only occur if suchseparation reflects the way that management intends to recover the value of suchintangibles. Else, it would be useful to subsume into goodwill most of the intangibles
assets that are typically recognised in a business combination (except for trademarks
and other similar assets);• intangibles assets with (in)definite useful lives should not be separately recognised but
included in the goodwill amount when the future economic benefits of such intangible
assets cannot be reliably measured;• the IASB should not require separate recognition of intangible assets with definite useful
lives that are only created via acquisitions (i.e. customer lists, brand names, etc.); and• the requirements on separate recognition of intangible assets should be simplified. Suchsimplification could be introduced by either introducing a practical expedient or
introducing a mandatory special rule for business combinations.
In contrast, a small number of respondents supported the current requirements on separate
recognition of intangible assets from goodwill. These respondents thought that separate
recognition of intangible assets from goodwill could not be avoided if an entity wanted toprovide a complete picture of a business combination and wanted to adequately present in
the balance sheet the different identifiable assets that have been acquired through abusiness combination. One respondent noted that if the current requirements on separate
recognition of intangible assets from goodwill were removed then there was the risk of“goodwill becoming too large”. One other respondent believed that recognising intangible
assets separately from goodwill would provide useful information to users of financial
statements as management’s intention in the business combination and the resources
acquired as intangibles were reflected more clearly in the financial statements.

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APPENDIX 1 – List of respondents
Respondent

Country

Type

ACTEO

FranceBusiness Association – Preparers

Associazione Italiana Degli Analisti Finanziari

Italy

Professional Organisation of Users

AstaldiItaly

European Company – Preparer

Austrian Financial Reporting and Auditing
Committee

Austria

National Standard Setter

Autorité des normes comptables

FranceNational Standard Setter

Business Europe

EuropeBusiness Association – Preparers

CFA Society

UK

Professional Organisation of Users

CRUF

GlobalProfessional Organisation of Users

Deloitte Touche Tohmatsu Limited

GlobalAuditing

Deutsche Telekom AG

Germany

European Company – Preparer

Dutch Accounting Standards Board

Netherlands

National Standard Setter

ENEL

Italy

European Company – Preparer

Federation Bancaire Francaise

FranceBusiness Association – Preparers

FEE

EuropeProfessional Organisation of Accountants

French Society of Financial Analysts

FranceProfessional Organisation of Users

German Insurance Association

Germany

Business Association – Preparers

ICAEW

UK

Professional Organisation of Accountants

Institute of Chartered Accountants of Pakistan

Pakistan

Professional Organisation of Accountants

Instituto de Contabilidad y Auditoria deCuentasSpain

National Standard Setter

Insurance Europe

EuropeBusiness Association – Preparers

Intesa San Paolo

Italy

European Company – Preparer

Keidanren (Japan Business Federation)

Japan

Business Association – Preparers

Societe Generale

FranceEuropean Company – Preparer

Swedish Enterprise Accounting Group

SwedenBusiness Association – Preparers

Swedish Financial Reporting Board

SwedenNational Standard Setter

The 100 GroupUK

Business Association – Preparers

The Japanese Institute of Certified Public
Accounts

Japan

Professional Organisation of Accountants

The Securities Analysts Association of Japan

Japan

Professional Organisation of Users

UniCredit

Italy

European Company – Preparer

Feedback Statement - Discussion Paper 'Should Goodwill still not be Amortised?

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