Goodwill - Assessing the financial impact and required disclosures

*Source SNG Grant Thornton

Please note that every effort has been made to ensure that the advice given in this educational material is correct. Nevertheless, that advice is given purely as guidance readers to assist them with particular problems relating to the subject matter of the educational material, and African Venture Group will have no responsibility to any person for any claim of any nature whatsoever that may arise out of, or relate to, the contents of this educational material.


Goodwill is required to be tested annually for impairment. COVID-19 could impact goodwill through:

a significant adverse change in legal factors or in the business climate (eg an entity expects a decrease in its exports to a particular foreign market as a result of lengthy border closings)

• a loss of key personnel that is other than temporary (eg death)

• the testing for write-down or impairment of a significant asset group

• the recognition of a goodwill impairment loss in an investee’s separate financial statements

• a significant decline in the entity’s share price which could result in the carrying amount of the entity’s net assets exceeding its market capitalisation.

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