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Question 1 – Disclosures of recoverable amount
Deloitte agrees with the proposal to remove the requirement in paragraph 134(c) of IAS 36 to disclose the recoverable amount of each cash-generating unit (CGU) or group of units for which the carrying amount of goodwill or intangible assets with indefinite useful lives allocated to that unit (group of units) is significant in comparison with the entity’s total carrying amount of goodwill or intangible assets with indefinite useful lives because requiring such a disclosure as a matter of course is neither necessary nor a natural consequence of applying the requirements of IFRS 13.
Deloitte also agrees that the recoverable amount of an impaired asset should be disclosed in the event of an impairment or reversal, but suggests that further clarification is needed on the application of this requirement to impairments and reversals of assets, including goodwill, arising from an assessment of the recoverable amount of a cash-generating unit or group of cash-generating units rather than of an individual asset.
The example disclosure included in the ED appears to indicate that the proposed addition to paragraph 130(e) requires disclosure in these circumstances of the ‘implied fair value’ (or, when appropriate, the ‘implied value in use’) of goodwill rather than the fair value or value in use of the CGU or group of CGUs to which that goodwill is allocated. Deloitte recommends that it be made clear which value is required to be disclosed and that, if it is to be used, that the term ‘implied fair value’ be defined (presumably as the fair value of the cash-generating unit or group of cash-generating units to which the goodwill is allocated, less the carrying amount of other assets and liabilities of the unit or group of units).
Question 2 – Disclosures of the measurement of fair value less costs of disposal
Deloitte agrees that the proposed disclosures on the measurement of fair value less costs of disposal should be provided in the event of an impairment or reversal as they are a proportionate means of incorporating the principal disclosure requirements of IFRS 13 for non-recurring fair value measurement into the disclosure of impairments and reversals.
As a point of detail, Deloitte recommends that paragraph 130(f)(ii) and the related text of paragraph IE90 could be made clearer by referring to ‘the asset (cash-generating unit)’ rather than simply ‘the asset’.
Question 3 – Transition provisions
Deloitte agrees that the proposed disclosure requirements should apply only in periods in which IFRS 13 is applied.