IFRS: Italian Experience on Impairment Test of Goodwill

The introduction of IAS/IFRS and recent vicissitudes in financial markets have prompted the need for companies to pay particular attention to the application of impairment rules and to disclosure offered by financial statements. The study contributes to the debate on the necessity to improve the quality of financial statements required after this change and evolution, in order to provide stakeholders with adequate evidence on which to base their decisions. This need is particularly evident with regard to intangible assets and goodwill, of which it is necessary to supply a correct balance sheet representation and valuation, particularly since intangible assets are today one of the main productive factors that allow companies to gain a competitive advantage and hence create value. The research, divided into two sections, has set, as its main objective, ascertaining the accuracy of the information offered by consolidated financial statements of Italian companies listed on the Italian Stock Exchange, together with the analysis of impairment disclosure of all the entities belonging to FTSE MIB and FTSE MID CAP indices and to the Italian banking system. For this purpose, some international and national legislative provisions were considered: for each aspect, we proceed to state what legislative provisions require and then we expound our findings and observations.