Impairment Testing in the Current Uncertain Environment: A Deeper Look at Tangible, Intangible and Financial Assets

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Description

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Impairment testing continues to remain relevant in this uncertain environment, and is one of the key focus areas highlighted in ACRA’s Financial Reporting Practice Guidance No. 2 issued on 4 December 2020.

Against this backdrop, impairment testing models needs to be updated and reflect both the current status of a business and the economic and industry outlook. Property, plant and equipment, goodwill and other intangible assets needs to be assessed for impairment.

Due to unstable trading conditions and some customers’ inability to pay debts when due, estimating expected credit loss allowance (ECL) will require more judgment.

This workshop covers FRS 36 Impairment of Assets (including identifying indicators of impairment, understanding valuation approaches, applying commonly used valuation methods, preparing supportable forecasts and estimating an appropriate discount rate) and FRS 109 Financial Instruments, specifically measuring impairment under the ECL model for trade receivables, contract assets and lease receivables.

The objective is not only to equip participants with technical knowledge, but it is also designed to develop skills to estimate impairment loss at a practical level.

Programme Outline

Impairment of Assets

Objective, scope and basic principles under FRS 36

Identifying assets that may be impaired

Measuring recoverable amount

Identifying CGUs and impairment decision tree

Calculating value in use

• Estimating future cash flows
• Discount rate (i.e. WACC)
• Establishing the carrying amount of CGUs

Measuring fair value less cost of disposal

• Factors to consider in fair value measurement
• Valuation techniques i.e. market, income and cost approach
• Commonly used valuation methods

Recognition and reversal of impairment losses

Impairment of Financial Assets

Scope of impairment under IFRS 9

Understanding the expected credit loss (ECL) model

Measuring impairment

• General approach
• Simplified approach

Participants are encouraged to bring along their financial calculators.

This workshop qualifies for 7.0 CPE hours in Financial Reporting Standards and Pronouncements (Category 1).

Target Audience

Accountants, Auditors, Finance Professionals and Audit Committee Members

Expert Speaker

Ong Woon Pheng

Woon Pheng is a Chartered Accountant of Singapore (CA Singapore), Fellow Member of Association of Chartered Certified Accountants (FCCA), Chartered Financial Analyst (CFA), Chartered Valuer & Appraiser (CVA), International Certified Valuation Specialist (ICVS), Certified Fraud Examiner (CFE) and Accredited Tax Practitioner (ATP Income Tax).

Woon Pheng specialises in business valuation, valuation for FRS (including purchase price allocation, impairment review and valuation of intangible assets and financial instruments), financial and tax due diligence, divestment of business, mergers and acquisitions (M&A), fraud investigation, assessment of damages, expert witness and liquidation.

In addition to his various roles in the Singapore CA Qualification, Woon Pheng is also an adjunct faculty of Singapore University of Social Science ( SUSS ) where he teaches business valuation, financial reporting and corporate finance related subjects . In 2015, he was conferred the Teaching Merit Award by SUSS. He serves as a member in ISCA’s Investigation and Disciplinary Panel and the ACCA Singapore Professional Expert Forum. He is also a regular speaker on BusinessValuation in various conferences.