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Accounting, Finance and Economics
Oxford Brookes Business School
This paper reviews compliance with the IAS 36 goodwill impairment testing disclosure requirements by South African entities included in the All Share Index of the Johannesburg Stock Exchange. A detailed extraction of disclosures provided by entities with material levels of goodwill was compared to the key requirements. The approach taken is grounded in an assumption that the diligence with which preparers attend to visible disclosures acts a “litmus test” of the reliability of the invisible workings of the “black box” of impairment testing. The results are analysed through a critical narrative proposing insights relevant to preparers, auditors, regulators, and standard-setters. Consistent with results of studies in other jurisdictions the disclosures of South African entities are often incomplete and inconsistent, presented in a minimalist, generic, "boiler-plate" fashion considered to be of limited use to decision makers assessing the reliability of impairment testing. This is the first known detailed review of South African levels of compliance with goodwill impairment testing disclosure requirements offered as an initial contribution to assessing the reliability of goodwill balances reported by South African corporate entities.
After completing a Bachelor of Commerce and a Postgraduate Diploma in Accountancy at the, now, University of KwaZulu-Natal, Charles Day qualified as a Chartered Accountant (South Africa). He moved to the United Kingdom and worked for a variety of clients as a freelance finance consultant. Subsequently, Charles lived in Australia, Canada, United Kingdom, and United States working in a range of roles, most notably finance system implementation and accounting policy. He qualified as a Certified Public Accountant and then earned a Graduate Diploma in Finance from the University of London and Master of Accounting Science from the University of South Africa. At the beginning of 2016, Charles was able to realize a long-held goal to become an educator by teaching financial accounting, management reporting, finance, and auditing at Pearson College London.
Charles joined Oxford Brookes University in 2018 as a Senior Lecturer focused on teaching and research related to financial accounting.