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Description

The International Monetary Fund (IMF) has slashed gross domestic product growth forecasts for Singapore to 0.5% in October 2019, sharply down from the 2.3% it had in April 2019.

Impairment testing models needs to be updated, and reflect both the current status of a business and economic and industry outlook. Assessment of impairment of goodwill and fixed assets commonly feature as a key audit matter and one of the areas with the highest instances of non-compliance identified by ACRA in their recent Financial Reporting Surveillance Programme (FRSP).

With the new standard now effective, impairment of financial assets and its volatility could increase significantly, as they will respond much more directly to changes in credit risk trends as indicated by a combination of credit models, loan ratings and economic trends – and thereby introducing significant judgement into the process.

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 the ECL impairment model).

Exercises and Case Studies will be incorporated to allow you to develop the skills to compute value in use and fair value at a practical level.

Programme Outline

Impairment of Assets

  • Objective, scope and basic principles
  • 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 and requirements
  • Application of impairment requirements
  • Expected loss model
  • General approach
  • Simplified approach
    • Measuring impairment

Exercises and Case Studies are incorporated in this workshop to allow direct and practical application of the concepts taught.

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 Business Valuation in various conferences.

 

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Recordings

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