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Description
Since February, the external economic environment has deteriorated, due in part to the onset of the Russia-Ukraine conflict. In particular, the conflict has disrupted the global supply of energy, food and other commodities, which has in turn exacerbated global inflationary pressures and adversely affected the growth of many economies.
Against this backdrop, impairment testing models needs to be updated and reflect both the current status of a business as well as the economic and industry conditions.
Property, plant and equipment as well as intangible assets (including goodwill) needs to be assessed for impairment. Customers’ inability to pay debts when due and estimating expected credit loss allowance (ECL) will possibly 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
Understanding the expected credit loss (ECL) impairment model under IFRS 9
Measuring impairment
- General approach
- Simplified approach
Participants are encouraged to bring along their financial calculators or laptops with Excel installed.
This workshop qualifies for 7.0 CPE hours in Financial Reporting Standards and Pronouncements (Category 1).
What you will learn
- Learn to identify the indicators of impairment
- Understand valuation approaches and apply commonly used valuation methods
- Learn to prepare supportable forecasts and estimate an appropriate discount rate
- Develop practical skills to measure impairment under the ECL model for trade receivables, contract assets and lease receivables.
Target Audience
- Accountants
- Auditors
- Finance Professionals
- Audit Committee Members
- Anyone interested in doing Impairment Testing for Tangible, Intangible and Financial Assets
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.