This inaugural report also includes a survey of 150 European financial executives across a variety of industries, focusing on the challenges faced when performing goodwill impairment tests in accordance with IAS 36, and an interview with Professor Erik Peek, Duff & Phelps Chair in Business Analysis and Valuation.
Key highlights from the report include:
- The total amount of goodwill impaired by companies in the STOXX® Europe 600 Index in calendar year 2012 was €65 billion, a decrease of approximately 15% compared to 2011.
- Approximately 41% of European companies responding to the survey recognized a goodwill impairment in 2012.
- In terms of geography, the United Kingdom recorded the largest goodwill impairments overall in 2012, recognizing aggregate impairments of £18.5 billion (€22.8 billion).
- Overall market conditions and general industry downturns were given as the most common reasons for the goodwill impairments, with 62% of companies surveyed impairing between 20% and 50% of their goodwill balance in 2012.
- Telecommunication Services companies recorded the largest goodwill impairments overall in 2012, with aggregate impairments of €23.4 billion.
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