Disclosure of Goodwill Impairment

Running head: ACCOUNTING AND FINANCIAL REPORTING
ACCOUNTING AND FINANCIAL REPORTING
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Accounting and Financial Reporting1
Executive Summary
In the following report it is analyzed that what regulation should be maintained each entities
while impairment testing of the non-financial assets. AASB 136 and critical key issues related to
asset impairment testing is discussed in full detail. The company here taken in FLT (Flight
Centre Travel Group).

Accounting and Financial Reporting2
Table of Contents
1.1 Introduction................................................................................................................................3
1.2 Discussion..................................................................................................................................3
1.2.1 Summary of disclosure requirements for impairment of non-financial assets as per
AASB 136....................................................................................................................................3
1.2.2 Analyzing the annual report of FCT whether they have maintained the AASB 136 rules
or not............................................................................................................................................4
1.2.3 Some of the critical issues which arises during the impairment testing.............................4
1.2.4 Four issues in FLT which should be considered by the directors.......................................6
1.3 Conclusion.................................................................................................................................7

Accounting and Financial Reporting3
1.1 Introduction
FLT (Flight Centre Travel Group) is an Australian company whose shares are listed in
the ASX 300. Their relevancy of the annual report 2019 is thoroughly analyzed in this report.
Each and every entity must follow some simple steps while preparing impairment testing for the
non-financial assets to get a relevant and accurate information regarding the non-financial asset.
Non-financial assets includes goodwill, brand name and etc. Entities must follow disclosure
requirements stated under AASB 136 for relevant data. It is to be analyzed whether FLT
maintains all the regulations under AASB 136 or not. Full analysis in done on the impairment of
the non-financial assets and the impairment testing relevancy along with its key issues.
1.2 Discussion
1.2.1 Summary of disclosure requirements for impairment of non-financial assets as
per AASB 136
Paragraph 130 under AASB 136 states that an entity have to disclose their impairment
loss which was revised or recognized involving goodwill or some cash-generating unit like in
paragraph 130(e) states that any recoverable amount from an asset should be disclosed. In
paragraph 130(f)(i) it is stated that if the recoverable amount shows fair value less the cost of
disposal then description of the valuation technique(s) will be used, paragraph 130(f)(ii) states
that the level of fair value hierarchy will be used to measure the fair value. Paragraph 130(f)(iii)
for measuring the fair value, levels 2 & 3 hierarchy will be based on the determination of the fair
value minus costs from disposal will be calculated using the present value technique
(Asx300list.com 2020). In paragraph 134 every entity have to disclose their information stated in
(a)-(f) where the cash generating units which carries goodwill with indefinite uses and paragraph