An Examination of Goodwill Impairment: Compliance to MFRS 136 Among Top 30 Malaysian Public Listed Companies
摘要
The purpose of this paper is to examine the obligatory disclosure of goodwill impairment information in accordance with Malaysian Financial Reporting Standards 136 (MFRS). Malaysian financial reporting rules demand a wide variety of revealed information concerning goodwill impairment in the company's annual report, such as the carrying value of goodwill allocated to the cash generating unit and the cash flow forecast analysis. An empirical technique of content analysis was used as a quantitative method by analysing the consolidated financial statements of chosen companies listed on the Main Board of Bursa Malaysia. Our sample consisted of 30 companies from the largest companies by market cap in the Malaysian Stock Market and we analysed from the notes to the account in the annual report as at 31 December 2020. The findings indicate that there was a general lack of compliance, which affected the comparability of statements. Hong Leong Financial Group Bhd, Tenaga Nasional Bhd, and Public Bank BHD fully comply with MFRS 136, however some companies disclosed only a few of necessary information while three of them did not disclose anything related to MFRS 136. It's reasonable to conclude that the primary failings of the companies under consideration are connected to the information's detailed description and precise compliance with estimations of goodwill. Regulators can use these insights to improve the quality of financial statement disclosures.