Course Introduction
The Goodwill and Asset Impairment Audit Training Course provides a practical framework for auditing impairment assessments relating to goodwill and other assets subject to impairment testing. The course is designed for external auditors, internal auditors, accountants, finance managers, valuation professionals, financial reporting specialists, and assurance practitioners who need to evaluate significant impairment judgments and estimates.
The program examines the complete impairment assessment process, beginning with the identification of impairment indicators and continuing through cash-generating unit allocation, recoverable amount determination, value-in-use calculations, fair value assessments, impairment losses, reversals where applicable, and financial statement disclosures. Participants will learn how to connect management’s impairment assessment to audit risks, assertions, procedures, and evidence.
Particular emphasis is placed on the highly judgmental assumptions that drive impairment models. Participants will evaluate revenue growth, operating margins, forecast cash flows, terminal growth rates, discount rates, capital expenditure, working capital requirements, useful lives, market conditions, and other assumptions that can materially influence recoverable amounts. The course develops practical techniques for challenging management forecasts and assessing whether assumptions are supported by reliable evidence.
The course also addresses the allocation and testing of goodwill and other assets within cash-generating units and similar asset groupings. Participants will examine how management identifies appropriate units, allocates goodwill, assesses impairment indicators, determines carrying amounts, and compares those amounts with recoverable amounts. Special attention is given to situations involving acquisitions, restructuring, underperforming operations, declining markets, changes in strategy, and other circumstances that may create heightened impairment risk.
Strong emphasis is placed on audit procedures for impairment estimates, including independent recalculation, sensitivity analysis, benchmarking, historical forecast accuracy, comparison with market evidence, assessment of subsequent events, and evaluation of valuation specialists. Participants will also consider fraud and financial reporting risks, including optimistic forecasts, inappropriate CGU allocation, unsupported discount rates, delayed impairment recognition, selective assumptions, and management bias.
Technology and data analytics are incorporated into the program to strengthen modern impairment auditing. Participants will explore spreadsheet and model analytics, automated impairment systems, financial data analysis, scenario modelling, AI-supported forecasting, model governance, data integrity, and continuous monitoring. Practical case studies enable participants to perform impairment testing, investigate valuation differences, evaluate estimation uncertainty, document audit evidence, and prepare clear audit conclusions and recommendations.
Duration
5 days
Who Should Attend
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External auditors responsible for auditing goodwill and asset impairment assessments.
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Internal auditors reviewing impairment processes, valuation controls, and financial reporting risks.
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Audit managers and supervisors responsible for impairment audit engagements.
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Financial accountants responsible for impairment calculations and financial reporting.
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Finance managers overseeing impairment testing and year-end financial close.
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Valuation professionals involved in recoverable amount and business valuation exercises.
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Financial reporting specialists dealing with goodwill, intangible assets, and impairment disclosures.
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Risk professionals assessing valuation, business performance, and financial reporting risks.
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Model risk professionals reviewing impairment models and forecast methodologies.
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Internal control professionals evaluating controls over impairment assessments.
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Data analysts supporting financial forecasting and impairment analytics.
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Forensic auditors investigating potential earnings management or delayed impairment recognition.
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Professionals involved in mergers, acquisitions, restructuring, and post-acquisition financial reporting.
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Audit committee and financial oversight professionals reviewing significant impairment judgments.
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Accounting, finance, and audit professionals seeking practical impairment audit expertise.
Course Objectives
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Develop practical expertise in auditing goodwill and asset impairment assessments, including indicators, models, assumptions, evidence, controls, and disclosures.
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Identify impairment indicators and evaluate whether management has appropriately assessed assets and cash-generating units for potential impairment.
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Assess the identification, composition, and allocation of cash-generating units and evaluate whether goodwill is appropriately allocated for impairment testing.
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Evaluate recoverable amount calculations based on value in use and fair value approaches, including the assumptions and methodologies supporting management estimates.
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Audit cash-flow forecasts by comparing assumptions with historical performance, approved budgets, strategic plans, market evidence, and subsequent actual results.
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Test significant valuation assumptions including growth rates, margins, discount rates, terminal values, capital expenditure, working capital, and forecast periods.
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Apply sensitivity analysis, scenario testing, independent recalculation, benchmarking, and other procedures to evaluate estimation uncertainty and headroom.
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Identify impairment-related fraud risks and management bias, including optimistic forecasts, delayed recognition, inappropriate CGU allocation, and unsupported valuation assumptions.
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Evaluate internal controls over impairment testing, model governance, management review, valuation specialists, data integrity, approvals, and financial reporting.
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Prepare comprehensive audit documentation, findings, recommendations, and conclusions addressing impairment estimates, valuation uncertainty, financial reporting, and disclosures.
Comprehensive Course Outline
Module 1: Goodwill and Asset Impairment Audit Fundamentals
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Understanding the purpose of impairment testing and its relationship to asset valuation, financial reporting, audit risk, and management judgment.
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Identifying assets and circumstances that may require impairment assessment and understanding the different risks associated with goodwill and other asset categories.
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Connecting impairment estimates to audit assertions, materiality, estimation uncertainty, professional skepticism, and sufficient appropriate audit evidence.
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Developing a risk-based impairment audit strategy based on asset significance, model complexity, forecast uncertainty, market conditions, and management judgment.
Module 2: Impairment Indicators and Risk Assessment
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Identifying internal and external impairment indicators including declining performance, market capitalization changes, adverse economic conditions, technological disruption, and operational deterioration.
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Evaluating business-unit performance, revenue trends, margins, cash flows, market conditions, competitive pressures, and other evidence relevant to impairment risk.
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Assessing whether management’s impairment review appropriately considers both quantitative and qualitative indicators.
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Designing audit procedures to test the completeness and reliability of impairment indicators and determine whether additional impairment testing is necessary.
Module 3: Cash-Generating Units and Goodwill Allocation
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Understanding cash-generating units and evaluating how management identifies asset groupings that generate largely independent cash inflows.
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Auditing the allocation of goodwill to appropriate cash-generating units and assessing whether allocations are consistent with the way management monitors business performance.
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Evaluating changes to organizational structures, acquisitions, disposals, reorganizations, and business combinations that may affect CGU composition.
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Identifying risks arising from inappropriate aggregation, excessive segmentation, shifting goodwill between units, and allocation practices that could conceal impairment.
Module 4: Recoverable Amount and Value-in-Use Models
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Understanding recoverable amount concepts and evaluating the selection and application of value-in-use and fair value-based valuation approaches.
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Auditing value-in-use models by testing projected cash flows, operating assumptions, forecast periods, discount rates, terminal values, and other key inputs.
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Reconciling forecast cash flows to approved budgets, strategic plans, historical performance, board-approved forecasts, and other supporting evidence.
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Performing independent recalculations and analytical procedures to evaluate the mathematical accuracy, internal consistency, and reasonableness of impairment models.
Module 5: Forecasts, Discount Rates, and Valuation Assumptions
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Evaluating revenue growth, operating margins, cost assumptions, capital expenditure, working capital, tax assumptions, and other forecast variables affecting recoverable amounts.
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Testing discount rates and assessing the underlying components, market information, risk premiums, business risks, and consistency with relevant valuation evidence.
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Evaluating terminal growth rates, terminal values, long-term assumptions, and the relationship between terminal assumptions and sustainable economic conditions.
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Comparing current forecasts with historical forecasting accuracy and investigating significant changes in assumptions, performance expectations, or valuation outcomes.
Module 6: Fair Value, Market Evidence, and Independent Valuation
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Evaluating fair value approaches used in impairment testing and assessing market participant assumptions, comparable transactions, market multiples, and other valuation evidence.
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Testing external market data, comparable companies, industry benchmarks, transaction multiples, share prices, and other observable valuation inputs.
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Assessing valuations prepared by internal and external specialists and evaluating their methodologies, assumptions, qualifications, and supporting evidence.
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Comparing management valuations with alternative valuation approaches and investigating significant differences, valuation gaps, or unexplained movements.
Module 7: Sensitivity Analysis, Estimation Uncertainty, and Fraud Risks
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Performing sensitivity analysis to determine how changes in key assumptions affect recoverable amounts, impairment headroom, and potential impairment losses.
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Developing alternative scenarios for revenue growth, margins, discount rates, terminal growth, and other significant assumptions to assess estimation uncertainty.
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Identifying fraud and financial reporting risks involving optimistic forecasts, delayed impairment recognition, unsupported assumptions, inappropriate asset allocation, and earnings management.
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Applying professional skepticism when management assumptions consistently produce significant headroom despite adverse operational, financial, or market evidence.
Module 8: Technology, Data Analytics, and Impairment Model Auditing
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Using data analytics to compare impairment assumptions with historical transactions, operational results, budgets, forecasts, market information, and subsequent actual performance.
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Auditing spreadsheet-based and automated impairment models for formula integrity, data links, calculation accuracy, access controls, and unauthorized changes.
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Evaluating AI-supported forecasting and valuation tools, including model transparency, data quality, model drift, bias, governance, and human oversight.
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Applying technology-enabled procedures to identify unusual forecast changes, inconsistent assumptions, abnormal model outputs, and unexpected impairment movements.
Module 9: Controls, Audit Evidence, Financial Reporting, and Disclosures
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Evaluating internal controls over impairment identification, model preparation, assumptions, management review, valuation specialists, approvals, and financial reporting.
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Testing reconciliations between impairment models, general ledger balances, asset registers, acquisition records, management reports, and financial statements.
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Assessing impairment losses, carrying amounts, reversals where applicable, and related accounting entries for completeness, accuracy, classification, and appropriate financial reporting.
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Auditing impairment disclosures, including significant assumptions, estimation uncertainty, sensitivity information, goodwill movements, and other relevant financial statement information.
Module 10: Integrated Impairment Audit Case Studies and Practical Applications
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Performing an end-to-end goodwill impairment audit involving CGU identification, goodwill allocation, cash-flow forecasts, discount rates, terminal values, and recoverable amount assessment.
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Analyzing a practical impairment model to identify formula errors, unsupported assumptions, inconsistent forecasts, data-quality problems, and unexplained valuation differences.
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Conducting sensitivity and scenario analysis to assess impairment headroom and determine the potential impact of changes in significant assumptions.
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Preparing audit findings, recommendations, management communications, and conclusions addressing impairment risk, valuation uncertainty, model weaknesses, controls, and financial reporting.
Training Approach
This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.
Tailor-Made Course
This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808
Training Venue
The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.
Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant
Certification
Participants will be issued with Upskill certificate upon completion of this course.
Airport Pickup and Accommodation
Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808
Terms of Payment:
Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.
