Impairment testing continues to be a critical area in financial reporting, requiring careful judgement and adherence to accounting standards. It ensures – goodwill and other assets are carried at their recoverable amounts, reflecting their true economic value. A key element of this process is the preparation of future cash flow projections which helps to determine the recoverable amount of assets such as goodwill, intangible assets, and property, plant, and equipment. Ind AS 36, Impairment of Assets, requires these projections to be based on reasonable and supportable assumptions that reflect the management’s best estimate of future economic conditions. This edition of the Accounting and Auditing Update (AAU) features an article that aims to discuss the key considerations that must be taken into account when determining the duration of cash flow projections for impairment testing along with examples adapted from decisions published by the European Securities and Markets Authority (ESMA).
In 2024, the Securities and Exchange Board of India (SEBI) amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) to mandate that specified companies whose equity shares or convertible securities are listed on a stock exchange to confirm, deny, or clarify market rumours reported in mainstream media that may have lead to a material price movement in such securities. This requirement initially applied only to the top 100 listed entities starting 1 June 2024 and from 1 December 2024 was extended to cover the top 250 listed companies. This publication includes an article that showcases the reporting practice of the covered entities - to confirm or deny a reported event or information by analysing the filings made by these entities pursuant to Regulation 30(11) of the LODR Regulations during the period from 1 June 2024 to 30 June 2025.
As always, we have included a digest of recent regulatory updates in India and internationally.
We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of AAU.
For more information on this update, please write to aaupdate@kpmg.com.
